BEFORE  THE  NATIONAL  WAR  LABOR  BOARD. 


IN  RE  MEDIATION  PROCEEDINGS  BETWEEN 
DIVISION  268  OF  THE  AMALGAMATED  ASSOCIATION  OF 
STREET  AND  ELECTRIC  RAILWAY  EMPLOYES 
OF  AMERICA 

AND 

THE  CLEVELAND  RAILWAY  COMPANY. 

EB 

STATEMENT  OF  THE  CLEVELAND  RAILWAY  COMPANY. 
JUNE,  1918, 


SQUIRE,  SANDERS  & DEMPSEY, 

GENERAL  COUNSEL. 


V" 


33)' ) , 

C598u 


IN  RE  MEDIATION  PROCEEDINGS  BETWEEN 
DIVISION  268  OF  THE  AMALGAMATED  ASSO- 
CIATION OF  STREET  AND  ELECTRIC 
RAILWAY  EMPLOYES  OF  AMERICA 
And 

THE  CLEVELAND  RAILWAY  COMPANY. 


STATEMENT  OF  THE  CLEVELAND  RAILWAY 
COMPANY. 

June,  1918. 

The  Cleveland  Railway  Company  was  organized  in  1893 
under  the  name  of  The  Cleveland  Electric  Railway  Company, 
by  the  statutory  consolidation  of  a number  of  electric  railway 
companies.  In  1903  it  acquired  by  purchase  the  property  and 
franchises  of  The  Cleveland  City  Railway  Company,  and 
thereby  became  the  sole  owner  of  all  the  traction  properties 
in  Cleveland  and  in  several  adjoining  municipalities.  The 
properties  in  Cleveland  were  operated  under  franchises  from 
the  city,  limited  both  as  to  duration  and  rates  of  fare. 

For  several  years  prior  to  1908,  a controversy  was  waged 
between  the  city  and  the  company  with  reference  to  the  re- 
newal of  its  franchises.  This  controversy  became  famous  as 
a fight  for  and  against  three-cent  fare. 

In  April,  1908,  the  company  was  granted  a renewal  of  its 
^ '-franchises  for  a period  of  twenty-five  years,  the  rate  of  fare 

• being  fixed  at  six  tickets  for  twenty-five  cents,  and,  as  part 

• of  the  arrangement,  the  company  was  required  to  lease  all 
~ of  its  properties  to  a company  organized  and  known  as  The 

A Municipal  Traction  Company,  which  was  a private  corpora- 
^ tion  organized  by  city  officials.  Under  this  arrangement,  into 
which  The  Cleveland  Railway  Company  was  forced  by  the 
expiration  of  its  franchises,  and  to  prevent  further  confisca- 
V-^^tion,  the  company  agreed  to  and  did  reduce  its  capital  stock 
U 45%,  and  to  accept  interest  on  the  remaining  55%  at  the  rate 
of  six  per  cent  per  annum  and  no  more,  the  company  realizing 
that  in  this  action  it  was  forced  to  submit  to  confiscation  of 


\ 


1 


its  property  to  the  extent  of  approximately  five  millions  of 
dollars. 

The  Municipal  Traction  Company  took  possession  of  the 
property  under  this  lease,  and  operated  it  until  the  following 
October,  when  the  franchise  referred  to  was  defeated  by  a 
vote  of  the  people.  The  Municipal  Traction  Company  in  the 
meantime  became  insolvent,  and  receivers  were  appointed  by 
the  Hon.  Robert  W.  Tayler  in  the  United  States  District  Court 
for  the  Northern  District  of  Ohio  for  the  entire  properties  of 
The  Cleveland  Railway  Company  then  in  the  hands  of  its 
lessee,  The  Municipal  Traction  Company,  which,  as  before 
stated,  had  been  organized  by  city  officials. 

While  the  property  was  within  the  control  of  the  court, 
and  after  efforts  between  the  city  and  the  company  to  settle 
had  failed,  and  it  had  been  demonstrated  that  the  slogan  of 
three-cent-fare  was  a myth,  that  you  cannot  render  continu- 
ously for  any  great  length  of  time  for  three  cents  more  service 
than  three  cents  will  pay  for,  and  people  had  come  to  realize 
that  street-railroading  was  to  some  extent  like  other  business 
enterprises  wherein  an  amount  must  be  paid  at  least  equal  to 
the  cost  of  service,  Judge  Tayler  announced  a plan  of  settle- 
ment, which  was  adopted,  and  ever  since  has  been  known  as 
the  “Tayler  Plan.” 

This  Tayler  Plan,  it  may  be  remarked  in  passing,  is  in 
some  respects  more  dangerous  than  the  Johnson  three-cent- 
fare  plan.  It  is  more  specious.  It  will  take  longer  for  the 
public  to  realize  that  the  greatest  good  and  the  best  service 
cannot  come  to  the  public  through  its  operation.  We  now 
hear  of  its  adoption  being  talked  of  by  other  cities  and  com- 
munities, and  we  wish  to  give  this  word  of  warning, — that, 
while  it  has  many  attractive  features,  so  attractive  that  it  was 
accepted  in  good  faith  by  The  Cleveland  Railway  Company, 
which  committed  itself  to  operate,  and  is  now  trying  to  oper- 
ate, under  it  in  the  best  of  faith,  it  is  doing  so  notwithstand- 
ing that  many  of  its  people  believe  that  fundamentally  it  is 
fallacious. 

Every  commercial  enterprise,  to  be  successful,  must  offer 
a reward, — a reward  of  merit  for  efficient,  economical  man- 
agement. It  must  be  a reward  that  attracts  the  best  talent, 
a reward  that  stimulates  and  produces  initiative,  a reward 
that  leads  able  men  to  devote  their  lives  to  the  enterprise. 
After  all,  the  men  are  few  who  have  the  genius  to  make  great 
development.  These  few  men  are  born  leaders.  They  must 
be  encouraged,  and  must  be  permitted  to  point  out  the  way. 
Some  men  and  some  organizations  will  make  great  successes, 
while  others  in  the  same  field  will  make  great  failures.  The 
successes  must  be  promoted,  the  failures  prevented  if  possible. 
But  above  all  must  be  integrity ; and  deliberate  bad  faith  must 
be  avoided. 


2 


In  order  to  obtain  the  money  necessary  to  extend  and 
better  the  property,  the  investment  must  be  protected  and 
reward  promised  sufficient  to  attract,  under  all  conditions, 
sufficient  capital  with  which  to  make  additions  and  betterments 
at  the  times  when  they  will  be  most  beneficial  to  the  public, 
and  at  the  same  time  conserve  the  property.  In  a growing 
community  many  extensions  must  be  made  which  do  not  pay ; 
but  they  provide  for  the  future  and  anticipate  the  growth  of 
the  communities. 

The  Cleveland  Railway  Company  not  only  affords  street 
railroad  facilities  to  the  city  of  Cleveland,  but  as  well  to  some 
six  or  seven  other  municipalities  having  the  same  corporate 
rights  as  has  the  city  of  Cleveland,  and  these  varous  munici- 
palities feel  that  they  have  exactly  the  same  right  to  control 
the  street  railway  within  their  respective  limits  as  has  the 
city  of  Cleveland  within  its  corporate  limits.  Among  the  ad- 
vocates of  municipal  ownership — and  we  have  had  a great 
many  of  them  in  Cleveland — no  one  of  them  has  carried 
municipal  ownership  to  its  logical  conclusion.  Rather,  they 
have  wanted  municipal  speculation;  that  is,  to  have  the  City 
of  Cleveland  not  only  own  and  control  the  street  railway  with- 
in its  own  boundaries,  but  the  street  railway  within  the  six 
or  seven  other  municipalities  that  is  just  as  much  and  just 
as  essentially  a part  of  the  system  as  that  portion  within  the 
city  of  Cleveland.  These  other  municipalities  naturally  feel 
that  they  are  entitled  to  absolutely  the  same  rights  of  man- 
agement within  their  municipal  borders  as  is  the  City  of  Cleve- 
land within  its  municipal  limits,  so  that  it  takes  only  a mom- 
ent’s thought  to  demonstrate  that  municipal  ownership  of 
simply  the  property  within  the  borders  of  a municipality  is 
something  not  to  be  desired  by  any  one.  Control  of  all  rail- 
ways, steam  and  electric,  by  proper  authorities  and  proper 
supervision,  is  desirable,  but  the  control  that  takes  away 
initiative,  that  removes  the  promise  of  reward  for  good  service 
and  for  keeping  the  property  up  to  the  highest  point  of  effi- 
ciency, is  fundamentally  in  violation  of  economic  laws,  in  that 
legislatures  and  municipalities  cannot,  in  the  end,  control  abso- 
lutely without  serious  injury  to  the  public. 

Right  here  may  not  be  out  of  place  a few  words  upon  the 
question  of  “service  at  cost,”  to  which  The  Cleveland  Railway 
Company  is  committed.  There  is  no  such  thing  as  absolute 
service  at  cost.  It  must  be  approximate.  The  company  today, 
after  trying  for  eight  years,  with  the  earnest  co-operation  and 
assistance  of  the  city,  to  earn  expenses,  taxes  and  interest  at 
a rate  of  fare  of  three  cents  per  passenger,  or  three  cents 
plus  a cent  for  a transfer,  postponing,  at  the  request  of  the 
city,  the  writing  off  of  the  value  of  obsolete  property,  instead 
of  providing  for  obsolescence  and  depreciation  from  current 
earnings  at  a higher  fare,  has  sustained  an  actual  diminution 

3 


in  capital  value  of  nearly  ten  per  cent — which,  of  course,  must 
be  made  good  from  future  earnings — and  is  still  running  be- 
hind, although  the  maximum  rate  is  now  in  effect.  Of  the 
thirty-four  lines  of  railway  operated  by  the  company  less  than 
half  are  paying,  as  shown  by  tables  in  its  last  monthly  report, 
a copy  of  which  tables  is  hereto  attached,  marked  “Exhibit 
No.  6”  and  “Exhibit  No.  7,”  fewer  than  half  are  paying,  and 
these  are  carrying  the  other  half  or  more  ; so  that  riders  in 
one  part  of  the  community  accommodated  by  the  street  rail- 
way company  are  paying  more  than  cost,  for  the  benefit  of 
the  riders  upon  the  more  than  seventeen  lines  which  are  con- 
stantly losing.  Some  of  the  poor  lines  have  been  built  in 
response  to  an  absolute  demand,  under  the  city’s  direction  and 
compulsion,  when  the  city,  had  it  looked  into  the  subject  at 
all,  would  have  known  that  such  lines  would  not  pay  for  years 
to  come.  This  not  to  criticise  their  building,  because  undoubt- 
edly the  lines  were  needed,  but  to  emphasize  the  proposition 
that  cost  of  service  can  be  at  best  only  approximate,  but  must 
absolutely  protect  the  capital  which  has  been  invested  and 
which  must  continue  to  be  invested.  The  least  deviation  from 
this  unalterable  principle  drives  away  capital  and  prevents  the 
company  from  afterwards  procuring  it  except  upon  paying  a 
higher  rate  than  it  should  pay  if  its  good  faith  were  absolutely 
established  and  recognized. 

The  Tayler  Plan,  otherwise  known  as  the  “Service-for- 
Cost  Plan,”  was  incorporated  in  an  ordinance  enacted  by  the 
council  of  the  city  of  Cleveland  on  the  18th  day  of  December, 
1909.*  This  ordinance  was  accepted  by  the  company  and 
ratified  by  the  people,  and  the  company  resumed  possession 
of  its  property  on  the  first  day  of  March,  1910,  since  which 
time  it  has  operated  its  entire  system  in  accordance  with  the 
provisions  of  said  ordinance  and  certain  amendments  thereto 
which  it  is  not  now  important  to  consider.  Prior  to  the  adop- 
tion of  the  ordinance,  Judge  Tayler,  after  a long  hearing, 
fixed  the  valuation  of  the  company’s  property  at  approximately 
$23,000,000,  and  the  company  was  permitted  to  issue  securities 
in  that  amount.  This  valuation,  in  the  judgment  of  many  of 
the  large  interests  in  the  company,  caused  a loss  of  from  three 
to  five  millions  of  dollars  from  what  they  knew  they  should 
have  been  allowed.  The  basic  principle  of  the  Tayler  Plan 
is  expressed  in  the  preamble,  as  follows: 

“Whereas,  it  is  agreed  that  a complete  readjustment 
of  the  street  railroad  situation  should  be  made,  upon 
terms  that  will  secure  to  the  owners  of  the  property  in- 
vested in  street  railroads  security  as  to  their  property , 
and  a fair  and  fixed  rate  of  return  thereon,  at  the  same 
time  securing  to  the  public  the  largest  powers  of  regula- 

*A  copy  was  introduced  in  evidence  at  the  hearing  in  Chicago  and 
marked  “Exhibit  No.  4.”  Another  copy  is  attached  to  this  statement. 

4 


tion  in  the  interest  of  public  service,  and  the  best  street 
railroad  transportation  at  cost,  consistent  with  the  secur- 
ity of  the  property,  and  the  certainty  of  a fixed  return 
thereon,  and  no  more.” 

This  ordinance  must  be  studied  in  order  to  be  compre- 
hended, but  section  16  thereof,  after  defining  how  the  capital 
value  is  arrived  at,  and  providing  for  the  payment  of  interest 
upon  the  outstanding  bonds  and  also  upon  the  floating  indebt- 
edness of  the  company,  makes  the  following  provision: 

“The  company  may  issue  and  sell  its  capital  stock  or 
mortgage  bonds,  said  stock  being  sold  for  not  less  than 
par,  and  said  bonds  on  a basis  which  will  not  be  in  excess 
of  six  (6)  per  cent  on  par  and  will  include  in  such  rate 
provision  for  amortising  the  discount,  if  such  bonds  are 
sold  at  a discount,  or  increase  its  floating  indebtedness, 
in  such  amounts  as  shall  be  necessary  to  capitalize  the 
debt  enumerated  in  said  paragraph  (b),  or  to  provide  for 
such  extensions,  betterments  or  permanent  improvements 
as  it  is  by  this  ordinance  provided  may  be  added  to  the 
capital  value  upon  which  interest  is  to  be  paid;  and  the 
par  value  of  the  stocks  or  bonds  sold  or  debt  created  for 
such  purpose  shall  become  part  of  the  capital  value;  and 
if  bonds  are  sold  at  a premium,  such  premium  shall  be 
used  for  extensions,  betterments  or  permanent  improve- 
ments, or  for  paying  any  then  existing  indebtedness  of 
the  company. 

After  meeting  the  payments  heretofore  provided  for 
by  this  section,  there  shall  be  paid,  from  the  remainder 
of  said  interest  fund,  to  the  stockholders,  from  the  taking- 
effect  of  this  ordinance,  quarterly,  a sum  equal  to  six  (6) 
per  cent  per  annum,  payable  quarterly,  upon  the  residue 
of  capital  value  and  additions  thereto,  as  provided  by 
paragraph  (c)  hereof.” 

The  purpose  of  the  ordinance  is  again  clearly  stated  in 
section  47,  as  follows: 

“The  purpose  of  this  ordinance  is  to  establish  and 
settle  the  relations  between  the  city  of  Cleveland  and  The 
Cleveland  Railway  Company  by  a contract  which  will  se- 
cure to  The  Cleveland  Railway  Company,  unimpaired,  the 
capital  value  described  in  section  16  hereof,  and  the  rates 
of  return  thereon  provided  in  said  section,  and  which  will 
also  secure  to  the  city  of  Cleveland  adequate  and  efficient 
service  at  the  cost  thereof,  not  exceeding  the  maximum 
rate  of  fare  specified  in  section  22.” 

The  effect  of  the  ordinance,  therefore,  was  to  require  the 
company  to  provide  adequate  service  at  cost,  which  cost  should 
include  interest  on  the  bonded  indebtedness  of  the  company 
and  a rate  of  interest  to  the  stockholders  of  six  per  cent  per 

5 


annum  and  no  more;  to  accomplish  which  a schedule  of  fares 
was  established,  as  set  forth  in  section  22,  to-wit : 

“The  maximum  rate  of  fare  for  a single  continuous 
ride  within  the  present  limits  of  the  city  of  Cleveland,  in 
one  direction,  over  any  route  of  said  company,  shall  be 
four  (4)  cents  cash  fare,  seven  tickets  for  twenty-five 
cents,  one  cent  (lc)  transfer,  no  rebate;  and,  including 
said  maximum  rate,  the  following  schedule  or  scale  of 
fares  is  hereby  established.”  (See  ordinance,  section  22, 
for  complete  schedule.) 

Apropos  of  this  ordinance,  Judge  Tayler  made  an  address 
upon  the  subject  of  the  street  railway  settlement  on  February 
26,  1910,  a copy  of  which  address,  marked  “Exhibit  No.  8,” 
is  attached  hereto  for  reference.  The  following  is  a quotation 
from  that  address : 

“There  is  a large  duty,  than  which  none  is  higher, 
on  the  managers  of  this  street  railroad  property  during 
the  next  few  years.  They  must  not  content  themselves 
with  the  one  thought  that  they  have  a vested  right,  in 
perpetuity,  to  operate  this  property.  They  must  rise  to 
a conception  of  the  fact  that  they  owe  a duty  to  the  public, 
distinguished  from  the  mere  duty  of  operating  the  prop- 
erty. They  are  pledged  to  do  justice  to  the  community; 
and  I do  not  question  their  purpose  to  do  so.  But  it  will 
not  be  harmful,  since  I am  covering  the  various  elements 
of  the  community  in  respect  to  the  duty  that  they  owe  at 
this  juncture,  to  make  reference  to  them.  If  those  in 
the  immediate  management  of  the  property  do  not  wisely 
or  fairly  or  justly  manage  it,  having  regard  to  the  public — 
because  their  interests  are  absolutely  protected  in  the 
property,  and  there  ought  to  be  no  part  of  this  community 
more  earnestly,  or  personally  self  deny  ingly,  submitting 
their  case  to  the  arbitrament  of  the  public  than  those  who 
are  in  the  management  of  it,  because  they  are  under  no 
financial  risk  in  doing  it — if  the  management  will  not  do 
it,  then  the  public  spirit  and  public  honesty  of  the  board 
of  directors  ought  to  see  that  it  is  done  that  way ; and  if 
they  won’t  do  it,  then  the  five  or  six  thousand  shareholders 
in  this  community  ought  to  see  that  a board  of  directors 
is  elected  that  will  do  it;  because  not  one  of  them,  from 
manager  down  to  the  humblest  stockholder,  has,  in  truth 
or  in  fact,  any  real  or  different  interest  in  the  solution  of 
the  problem  and  the  working  out  of  the  plan  than  the 
poorest  rider  on  the  cars,  who  has  no  other  interest  in 
it  than  to  pay  his  money  and  take  his  ride.” 

The  management  of  the  street  railroad  property  and  those 
in  control  for  the  past  eight  years  have  cooperated  with  the 
city  to  the  limit,  and  even  beyond  it;  so  that  they  are  now 

6 


facing  an  actual  (temporary,  it  is  to  be  hoped)  depletion  of 
their  property  to  the  extent  of  more  than  ten  per  cent. 

Adverting  again  to  “service  at  cost”  not  being  a correct 
principle  fundamentally,  the  Commission  is  undoubtedly  fa- 
miliar with  what  is  being  done  in  the  express  company  com- 
bine. We  do  not  know  the  details  at  all,  but  the  principle,  as 
stated  in  a news  item,*  is  such  that  it  allows  dividends  on  stock 
at  the  rate  of  five  per  cent,  and  makes  a division  with  the 
government  of  any  additional  earnings;  so  that  there  is  a 
stimulus  on  the  part  of  the  management  towards  initiative  and 
efficiency  in  the  development  of  the  property  so  as  to  increase 
earnings.  In  some  cities  the  stock  of  street  railroad  com- 
panies has  been  permitted,  after  payment  of  an  agreed  per- 
centage, to  share  in  increased  earnings,  the  city  receiving  a 
part  of  such  increase  and  the  stockholders  retaining  another 
part.  Without  at  all  attempting  to  determine  what  will  be 
the  final  evolution  and  what  goal  we  must  all  work  towards, 
it  would  seem,  speaking  from  principle,  that  some  regulation 
along  the  line  of  sharing  with  those  who  furnish  the  manage- 
ment, the  initiative  and  the  capital,  increased  earnings  and 
increased  development,  is  much  nearer  the  attainment  of  cor- 
rect fundamentals  than  the  “service-at-cost”  idea,  which  cer- 
tainly is  impossible  of  attainment,  and  is  wrong  in  principle. 

Another  thing  that  “service  at  cost”  does  not  take  into 
account  at  all  is  the  treatment  of  employes  after  long  years 
of  service,  when  it  is  proper  and  reasonable  to  retire  them. 
No  allowance  is  made  to  The  Cleveland  Railway  Company 
for  anything  of  that  kind.  Those  connected  with  its  manage- 
ment have  always  felt  that  some  provision  should  be  made, 
by  which,  after  men  reach  a certain  age  or  become  disabled, 
some  pension  might  be  given  them  or  other  humane  provision 
made  for  them.  Nothing  of  that  kind  can  be  done  under  the 
Tayler  ordinance  or  under  any  plan  that  is  simply  “service  at 
cost.” 

Under  the  ordinance,  no  improvements  have  been  or  can 
be  made  without  the  express  approval  of  the  city.  During  the 
life  of  the  grant  thus  far,  the  company  has  added  to  its  capi- 
talization, for  the  purpose  of  taking  up  its  bonds  and  for  im- 
provements and  extensions,  about  $14,000,000,  all  of  which 
added  capital  has  been  supplied  either  at  the  request  of  the 
city  or  with  its  express  approval.  The  capital  value  of  the 
company  is  now  $34,000,000,  approximately,  every  dollar  of 
which  represents  actual  investment  and  is  entitled  to  be  pro- 
tected. 

Section  9 provides: 

“The  city  reserves  to  itself  the  entire  control  of  the 

service,  including  the  right  to  fix  schedules  and  routes, 


*See  Exhibit  No.  9. 


7 


including  routes  and  terminals  of  interurban  cars,  the 
character  of  the  cars,  the  right  to  increase  or  diminish 
service,  provided  only  that  the  council  shall  not  require 
service  to  an  extent  which,  at  the  maximum  rate  of  fare, 
will  not  produce,  to  be  credited  to  the  interest  fund, 
money  enough  to  make  good  any  loss  therein,  and  to  meet 
the  requirements  of  sections  16  and  18  hereof  . . . 

Section  10  of  the  ordinance  provides  for  the  appointment 
of  a representative  of  the  city  to  be  known  as  the  “City  Street 
Railroad  Commissioner,”  whose  duty,  generally  speaking,  is 
to  represent  the  city  in  seeing  that  the  road  is  operated  by 
the  company  in  accordance  with  the  terms  of  its  franchise. 
The  initial  rate  of  fare  was  fixed  at  three  cents  cash  fare, 
plus  one  cent  for  a transfer,  without  rebate.  The  company 
is  now  operating  at  the  maximum  rate  permitted  by  the  ord- 
inance; that  is,  four  cents  cash  or  seven  tickets  for  twenty-five 
cents,  and  one  cent  for  transfer. 

On  the  first  day  of  January,  1918,  the  company  had  sus- 
tained a net  loss,  as  the  result  of  eight  years’  operation,  of 
$2,612,552.72,  and,  to  that  extent,  its  capital  has  become  im- 
paired. It  has  yielded  to  this  impairment  in  an  endeavor  to 
act  in  the  spirit  in  which  Judge  Tayler  requested  the  street 
railway  officials  to  carry  out  the  terms  of  the  ordinance,  and 
in  reliance  upon  the  faith  of  the  city  in  permitting,  as  it  must, 
the  impairment  to  be  made  good  by  increasing  the  rate  of  fare, 
without  curtailing  the  service  which  the  city  wishes.  The  com- 
pany has  been,  and  is,  reluctant  to  resort  to  depriving  the 
seventeen  non-paying  lines  of  sufficient  service  to  accommodate 
the  public.  It  hopes  not  to  be  driven  to  any  such  necessity. 

In  addition  to  this  deficit,  the  company  has  no  reserve 
fund  for  renewals  or  replacements.  Any  good  business  enter- 
prise, economically  managed,  must  be  permitted  to  establish 
a reserve  fund. 

On  the  first  of  January,  1918,  there  was  pending  against 
the  company  litigation  involving  claims  in  excess  of  five  mil- 
lion dollars,  as  the  result  of  personal  injuries,  etc.,  and  the 
company  has  no  reserve  or  surplus  of  any  kind  whatever  to 
protect  it  against  such  claims.  Under  any  fair  treatment,  it 
should  be  permitted  to  have  some  reserve  or  contingent  fund 
with  which  to  meet  great  calamities.  Within  the  period  of 
eight  years  mentioned  more  than  one  accident  has  happened 
that  has  called  for  the  immediate  payment  of  many  thousands 
of  dollars,  but  no  fund  is  available  for  such  purpose. 

The  following  table  shows  the  wages  of  the  trainmen 
from  March  1,  1910,  to  May  1,  1918.  And  bear  in  mind  that 
during  this  period  wages  have  always  been  adjusted  by  agree- 
ment between  representatives  of  the  company  and  the  men. 
Previous  to  March  1,  1910,  22  cents  per  hour  in  the  first 

8 


year,  24  cents  per  hour  in  the  second  year,  25  cents 
per  hour  thereafter. 

From  March  1,  1910,  to  June  15,  1910,  23  cents  per  hour 
in  the  first  year,  25  cents  per  hour  in  second  year, 
26  cents  per  hour  thereafter. 

From  June  15,  1910,  to  May  1,  1915,  27  cents  per  hour  in 
first  year,  30  cents  per  hour  thereafter. 

From  May  1,  1915,  to  May  1,  1916,  29  cents  per  hour  in 
first  year,  32  cents  per  hour  thereafter. 

From  May  1,  1916,  to  May  1,  1917,  31  cents  per  hour  in 
first  year,  and  34  cents  per  hour  thereafter. 

From  May  1,  1917,  to  May  1,  1918,  32  cents  per  hour  in 
first  year,  35  cents  per  hour  thereafter. 

The  wage  agreement  between  the  union  and  the  company 
expired  on  May  1,  1918.  On  the  next  day  the  union  and  the 
company  agreed  that  you  should  arbitrate  and  determine, 
among  other  things,  the  wages  to  be  paid  to  the  men.  The 
demands  of  the  union  are  set  forth  in  the  agreement  of  sub- 
mission, of  which  the  following  is  a copy: 

“WHEREAS,  the  members  of  Division  No.  268  of 
the  Amalgamated  Association  of  Street  and  Electric  Rail- 
way Employes  of  America,  employes  of  The  Cleveland 
Railway  Company,  have  made  the  following  demands  on 
The  Cleveland  Railway  Company : 

1.  (a)  The  work  for  motormen  and  conductors  in  all 

week  days  shall  conform  to  as  near  ten  hours  as 
possible,  to  be  completed  as  follows: 

Forty  per  cent  to  be  completed  in  eleven  con- 
secutive hours  and  to  include  all  the  highest  paid 
and  best  runs.  Forty  per  cent  to  be  completed  in 
twelve  consecutive  hours.  Twenty  per  cent  to  be 
completed  in  thirteen  consecutive  hours. 

(b)  On  Sundays  and  holidays  runs  shall  all  be  straight 
runs  with  no  more  than  eight  hours’  time. 

(c)  Night  car  runs  shall  all  be  straight  runs  with  no 
more  than  eight  hours’  time  and  with  ten  hours’ 
pay. 

(d)  All  runs  carrying  mail  shall  be  so  designated  upon 
the  schedule. 

2.  On  and  after  the  first  of  May,  1918,  all  motormen 
and  conductors  in  the  employ  of  the  company 
are  to  be  paid  by  the  hour  on  the  following  basis : 
For  the  first  year  of  service  and  thereafter,  sixty 
cents  per  hour. 

AND  WHEREAS,  The  Cleveland  Railway  Company 
has  refused  to  grant  the  said  demands  and  a dispute  has 
consequently  arisen  between  the  parties; 

9 


NOW,  THEREFORE,  it  is  agreed  by  and  between 
Division  No.  268  of  the  Amalgamated  Association  of 
Street  and  Electric  Railway  Employes  of  America  and  The 
Cleveland  Railway  Company  that  the  above  disputed  mat- 
ters shall  be  submitted  to  the  National  War  Labor  Board 
for  a decision,  such  decision  to  be  in  force  from  May  1st, 
1918,  to  May  1st,  1919,  and  to  be  valid  and  binding  upon 
both  parties  hereunto. 

WITNESS  our  hands  and  seals  this  second  day  of 
May,  1918. 

THE  CLEVELAND  RAILWAY 
COMPANY, 


Witness : 

A.  L.  Faulkner, 
Com’r  of  Con- 
ciliation, U.  S. 
Dept,  of  Labor. 


(Signed)  John  J.  Stanley,  President. 
H.  J.  Davies,  Secretary. 
DIV.  NO.  268,  A.  A.  of  S.  & E.  R.  E.  of  A. 
(Signed)  Fred  Telschow,  President. 

F.  Schultz,  Business  Agent. 
W.  M.  Rea,  Secretary. 


You  will  note  that  the  employes  are  now  demanding  an 
advance  from  32  cents  per  hour  in  the  first  year  of  their  service 
and  35  cents  per  hour  thereafter  to  60  cents  an  hour  for  all 
conductors  and  motormen,  no  matter  how  short  their  service. 
From  every  standpoint  it  is  impossible  for  the  company  to 
grant  any  such  advance.  It  is  not  right,  and  the  company  is 
utterly  unable  to  pay  it. 

You  will  observe  that  since  the  company  resumed  pos- 
session of  its  property,  in  March,  1910,  it  has  made  five  ad- 
vances. All  were  made  by  agreement  with  the  men  or  their 
representatives,  although  one  was  after  an  arbitration.  The 
first  was  when  the  company  took  possession,  the  company  feel- 
ing at  that  time  that,  under  the  operation  by  the  receivers  and 
by  the  Municipal  Traction  Company,  the  men  had  not  been 
getting  enough.  The  next  agreement,  made  in  June,  1910, 
after  arbitration,  lasted  for  practically  three  years,  and  was 
an  increase,  broadly  speaking,  of  from  four  to  five  cents  per 
hour.  The  next  advance  was  after  the  European  war  had 
broken  out,  and  was  fixed  by  agreement  for  the  year  from 
May,  1915,  to  May,  1916,  being  practically  an  advance  of  two 
cents  per  hour.  Another  similar  advance  of  substantially  two 
cents  was  made  by  agreement,  which  was  operative  from  May 
1,  1916,  to  May  1,  1917.  In  1917,  again  by  agreement,  an 
increase  of  one  cent  per  hour  was  made.  So  that  in  the  eight 
years  last  past  the  company  has  at  all  times  agreed  with  its 
men  as  to  wages.  The  result  has  been  that  during  the  past 
year  the  wages  paid  constitute  an  advance  of  more  than  40% 
over  the  wages  paid  at  the  time  the  company  took  possession 
of  the  lines.  The  company  is  conceding  now  that  wages  should 

10 


be  increased  when  it  has  the  ability  to  pay ; but  it  can  find  no 
excuse  for  the  men  demanding  an  advance  of  71%  at  this  time. 
If  their  demand  were  for  10%  or  thereabouts,  we  would  con- 
cede that  just  as  soon  as  we  had  the  ability  to  pay  we  should 
pay  it;  in  which  event  we  would  request,  and  we  do  now  re- 
quest, this  honorable  body  to  say  to  the  city  of  Cleveland  that 
we  must  be  permitted  to  increase  our  rate  of  fare.  So  long 
as  the  city  has  absolute  control  of  the  service  and  has  the 
auditing  of  the  company’s  accounts,  and  so  long  as  the  com- 
pany can  add  nothing  to  its  capital  stock  except  with  the  con- 
sent and  approval  of  the  city,  there  is  no  reason  why  the  fran- 
chise should  contain  or  provide  for  a maximum  rate  of  fare. 
We  cannot  increase  the  rate  of  fare  to  an  extent  that  will  pay 
us  more  than  6%  upon  the  actual  capital  invested,  as  provided 
by  the  original  ordinance  and  by  amendments  since  that  time. 

The  city  is  protected  in  two  ways : It  can  always  buy  our 
stock  at  $110  per  share;  and  it  can  require  us,  if  necessary 
for  its  protection,  if  money  can  be  obtained  more  cheaply  at 
any  time,  to  transfer  our  property  to  such  other  person  as  may 
be  named  by  the  city;  and  it  is  obvious  that  if  the  company 
is  to  obtain  money  sufficient  to  make  such  improvements  and 
extensions  as  the  city  may  from  time  to  time  feel  are  needed, 
the  stock  must  always  be  maintained  at  a sufficient  market 
price  above  par  to  ensure  the  immediate  investment  of  capital 
by  people  having  money  to  sell,  for  the  company  must  buy  its 
money  precisely  as  it  buys  its  material, — not  as  it  buys  its 
labor,  for  labor  stands  on  a different  plane.  In  some  respects 
it  is  more  dependent  upon  the  street  railway  company,  in  others 
less  dependent,  because  a laborer  may  at  any  time  change  his 
employment.  At  the  present  time  there  is  a great  demand  for 
labor,  and  abnormal  wages  are  being  paid  in  some  factories 
for  munition  workers  and  by  some  contractors  who  are  taking 
government  contracts  at  cost  plus,  thereby  paying  little  atten- 
tion to  what  cost  is  so  that  the  labor  is  performed.  In  this 
situation  many  of  this  company’s  old  and  faithful  employes 
are  being  taken  away,  and  the  company  must  be  given  the 
ability  to  pay  what  you  shall  say  is  a fair  wage  for  the  service 
required  of  its  employes. 

The  company  said  in  your  hearing,  and  now  concedes, 
that  the  men  are  entitled  to  an  increase  in  the  wage  scale  be- 
cause of  the  sudden  and  unexpected  increase  in  the  cost  of 
living  brought  about  by  conditions  beyond  the  control  of  either 
party;  but  the  company  does  not  and  cannot  concede  that  the 
men  are  entitled  to  the  increase  demanded.  Motormen  and 
conductors  are  not  skilled  employes,  in  the  sense  in  which  the 
term  “skilled”  is  commonly  used,  for  only  a few  days’  training 
is  essential  to  enable  one  to  perform  the  duties  of  motorman 
or  conductor.  The  work  is  not  difficult, — is,  in  fact,  much 
easier  than  almost  any  other  unskilled  employment.  The 

11 


United  States  Department  of  Labor  made  an  exhaustive  study 
of  street  railway  employment  in  the  United  States,  including 
Cleveland,  and  the  results  of  its  investigation  were  reported 
in  April,  1917,  in  the  Bulletin  of  the  United  States  Bureau  of 
Labor  Statistics,  from  which  we  quote  (page  13)  : 

“The  occupation  (of  conductor)  is  semi-clerical  in 
some  respects,  and  one  of  responsibility  rather  than  of 
skill.  In  the  modern  cars  the  work  is  comparatively  easy, 
as  fares  are  collected  as  passengers  enter  the  car.  But 
conductors  ^re  required  in  most  cities  to  remain  standing 
for  long  periods  without  opportunity  to  rest.” 

This  is  not  true  in  Cleveland,  as  seats  have  been  provided 
for  all  conductors. 

“The  work  (of  motormen)  is  easily  learned,  and 
should  be  classed  as  responsible  rather  than  a skilled  occu- 
pation, although  experience  increases  efficiency,  especially 
in  avoiding  accidents.  Employes  usually  reach  the  aver- 
age of  efficiency  within  two  years.  In  most  cities  motor- 
.men  are  allowed  to  be  seated  when  outside  congested 
districts.” 

This  rule  obtains  in  Cleveland. 

The  work  is  attractive,  and  this  is  shown  by  the  well- 
known  fact  that  many  men  follow  it  all  their  lives.  It  offers 
an  opportunity  to  work,  if  the  employe  so  desires,  three  hun- 
dred and  sixty-five  days  of  the  year.  And  it  is  not  affected 
by  weather  conditions,  as  are  the  building  and  many  other 
trades. 

The  report  to  which  we  have  just  referred  shows  that 
The  Cleveland  Railway  Company’s  wage  scale  has  been  con- 
siderably higher  than  the  average.  (See  page  18.) 

What  the  present  average  wage  of  34  cents  per  hour 
amounts  to  in  gross  and  per  car-mile  is  shown  in  Exhibit 
No.  19,  hereto  attached.  The  same  exhibit  shows  the  extent 
to  which  increases  of  from  one  cent  to  26  cents  per  hour, 
raising  the  wages  to  from  35  to  60  cents  per  hour,  would 
increase  the  expenses  of  the  company  in  gross  amount  and 
per  car-mile. 

WORKING  CONDITIONS. 

The  Company  has  already  voluntarily  met  all  the  changes 
in  working  conditions  which  it  conceives  to  be  possible  under 
the  present  situation.  The  basic  objection  to  the  demand  for 
changes  in  working  conditions  is  the  fact  that  it  would  require 
several  hundred  more  men  to  perform  the  same  service  which 
is  now  being  rendered  by  the  Company’s  employes,  and  it  is 
now  difficult  to  find  enough  men  to  properly  operate  the  road. 
We  respectfully  submit  that  if  this  Board  is  to  follow  the 
principles  and  policies  which  it  has  laid  down  for  its  guidance, 
no  change  should  be  made  in  working  conditions. 

12 


“The  maximum  production  of  all  war  industries 
should  be  maintained,  and  the  methods  of  work  and  oper- 
ation on  the  part  of  employers  or  workers  which  operate 
to  delay  or  to  limit  production,  or  which  have  a tendency 
to  artificially  increase  the  cost  thereof,  should  be  dis- 
couraged. 

“In  fixing  wages,  hours,  and  conditions  of  labor, 
regard  should  always  be  had  to  the  labor  standards,  wage 
scales  and  other  conditions  prevailing  in  the  localities 
affected.” 

It  must  be  remembered  that  the  business  of  operating  a 
street  railroad  is  peculiar,  because  of  the  public  demand  that 
cars  be  operated  throughout  the  entire  twenty-four  hours  of 
each  day,  and  the  further  public  demand  that  at  least  one-half 
of  the  entire  twenty-four  hours’  business  shall  be  transacted 
within  a period  of  six  hours,  which  are  not  continuous,  and 
during  which  all  of  the  equipment  and  men  must  be  employed. 

Exhibit  No.  1 shows  the  number  of  cars  necessary  to  give 
the  service  required  by  the  city  on  a typical  line  of  The  Cleve- 
land Railway  Company,  and  the  present  arrangement  of  runs 
to  operate  those  cars. 

Exhibit  No.  2 shows  the  same  line,  with  the  runs  re- 
arranged as  proposed  in  the  demands  of  the  union. 

Comparison  of  the  two  exhibits  shows  the  enormous  in- 
crease in  the  number  of  short  runs,  and,  consequently,  in  the 
number  of  additional  men  that  would  be  required  to  operate 
under  the  proposed  schedule. 

We  again  wish  to  call  the  attention  of  the  Board  to  that 
portion  of  the  Company’s  franchise  which  provides: 

“The  city  reserves  to  itself  the  entire  control  of  the 
service,  including  the  right  to  fix  schedules  and  routes.” 
Exhibit  No.  3 shows  statistically  what  Exhibits  1 and  2 
show  graphically. 

The  total  number  of  men  now  working  eight  hours  is 
1951.  Under  the  proposed  scale  the  number  of  men  working 
eight  hours  would  be  1385 ; that  is,  566  men  who  are  now 
working  eight  hours  would  have  to  be  satisfied,  under  the  pro- 
posed arrangement,  with  something  less  than  eight  hours.  The 
table  further  shows  that  the  total  number  of  men  now  work- 
ing less  than  eight  hours  is  423,  which  number,  under  the  pro- 
posed schedule,  would  be  increased  to  1844;  that  is  to  say, 
1421  additional  men  would  be  required  to  work  less  than  eight 
hours.  The  number  of  men  now  operating  three  typical 
lines  is  350.  The  proposed  arrangement  would  require  476 
men  to  do  the  same  amount  of  work.  For  the  entire  system 
2374  men  are  required  to  operate  the  present  schedule. 
Under  the  new  arrangement  855  additional  men  would  be  re- 
quired,— an  increase  of  36%i — in  order  to  operate  precisely 
the  same  number  of  car-miles.  Under  the  present  arrange- 

13 


ment,  the  company  has  now  a five-hour  minimum;  that  is,  a 
man  is  paid  for  at  least  five  hours  if  he  works  at  all.  At  pres- 
ent the  company  is  required  to  pay  each  year  for  179,819  hours 
for  which  it  has  received  no  service.  The  proposed  arrange- 
ment of  runs  would  increase  what  we  are  pleased  to  call 
“dead”  time  to  462,134  hours  per  annum,  for  which  the  com- 
pany would  be  required  to  pay  the  full  wage  without  receiving 
any  service.  At  the  present  wages  this  would  require  an  ex- 
penditure of  $161,746.  If  the  maximum  demand  as  to  wages 
were  granted,  it  would  cost  the  company  $277,280  per  annum 
for  this  one  item  of  “dead”  time  alone. 

Details  for  the  foregoing  conclusions  are  shown  on  the 
sheets  following  Exhibit  No.  3,  and  a part  of  that  Exhibit. 

Surely  a demand  for  a change  in  working  conditions  that 
would  require  the  company  at  this  time  to  employ  855  addi- 
tional men,  and  to  pay  for  an  increase  of  157%  of  “dead” 
time  is  not  in  line  with  the  principles  laid  down  by  the  Board. 

The  Wage  Scale  Commission,  to  which  Director-General 
McAdoo  referred  the  question  of  wages  and  hours  of  sendee 
of  railroad  employes,  in  its  recommendations  with  respect  to 
hours  of  service,  says: 

“Manifestly,  therefore,  at  this  time,  when  men  must 
be  constantly  taken  from  the  railroads,  as  from  all  other 
industries,  to  fill  the  growing  needs  of  the  Nation’s  army, 
hours  of  labor  cannot  be  shortened  and  thereby  a greater 
number  of  men  be  required  for  railroad  work.  The 
Nation  cannot,  in  good  faith,  call  upon  the  farmers  and 
the  miners  to  work  as  never  before  and  press  themselves 
to  unusual  tasks,,  and  at  the  same  time  so  shorten  the 
hours  of  railroad  men  as  to  call  from  farm  and  mine 
additional  and  unskilled  men  to  run  the  railroads.  While 
the  Commission  is  strongly  disposed  to  a standard  day, 
in  so  far  as  the  nature  of  the  service  will  permit  it,  its 
firm  judgment  consequently  is  that  the  existing  hours  of 
service  in  effect  on  the  railroads  should  be  maintained 
for  the  period  of  the  war.”  (Preamble  General  Order 
No.  27.) 

We  again  remind  the  Board  that  the  entire  difficulty  with 
reference  to  hours  of  service  is  created  by  a situation  beyond 
the  control  of  either  the  company  or  the  men.  If  the  volume 
of  traffic  were  uniform  throughout  the  twenty-four  hours, 
there  would  be  no  difficulty  in  allowing  a man  to  complete  his 
day’s  work  in  eight  straight  hours.  It  has  been  our  observa- 
tion that  human*  ingenuity  has  been  exhausted  in  an  endeavor 
to  improve  schedules.  The  company  has  always  invited  the 
men  to  suggest  improvements  in  the  schedules,  and  has  adopted 
any  that  was  at  all  practicable.  We  respectfully  submit  that 
the  exhibits  show  that  any  further  changes  are  utterly  im- 
practicable at  this  time. 


14 


FINANCIAL  CONDITION  OF  THE  COMPANY. 

The  financial  condition  of  the  company  will  not  permit 
any  increase  in  the  scale  of  wages.  We  have  already  shown 
the  plan  of  operation  under  the  Tayler  franchise,  the  funda- 
mental principle  of  which  is  service  at  cost,  including  the 
interest  payment  of  6% i per  annum  to  the  stockholders  on  the 
amount  of  capital  actually  invested.  (See  ordinance,  Exhibit 
No.  4.)  By  the  provisions  of  this  ordinance  the  company  is 
required  to  operate  its  railway  until  the  first  day  of  May,  1934, 
and  it  is  further  required  to  make  such  extensions,  better- 
ments and  permanent  improvements  as  are  reasonably  required 
by  the  growth  of  the  city.  The  company  has  not  created,  nor 
is  it  entitled  to  create,  any  surplus  under  the  provisions  of 
the  ordinance.  By  its  terms  it  is  limited  to  a maximum  rate 
of  fare  of  four  cents  cash,  seven  tickets  for  twenty-five  cents, 
and  one  cent  for  transfer.  The  result  of  operations  for  the 
year  ending  February  28th,  1918,  was  a net  deficit  of  $920,- 
438.69.  The  company  is  now  operating  at  the  maximum  rate 
of  fare,  and  the  testimony  of  the  auditor  shows  the  deficit  on 
the  present  scale  of  wages  for  the  year  ending  February  28th, 
1919,  will  amount  to  $925,734.00.  (See  Exhibit  5.) 

It  is  therefore  apparent  that  if  an  increase  in  wages  is 
made,  it  will  have  to  be  paid  out  of  the  capital  of  the  company 
unless  the  fare  is  increased, — a thing  which  the  company  can- 
not control.  The  company  is  required  to  operate  its  railway. 
It  is  also  required,  by  the  terms  of  the  ordinance,  to  maintain 
its  capital  intact.  It  cannot  do  both  unless  the  city  consents 
to  an  increase  in  the  rate  of  fare ; and  any  increase  in  the  scale 
of  wages  should  be  conditioned  on  a proper  increase  in  the 
rate  of  fare. 

It  has  been  suggested  that  the  financial  condition  of  the 
company,  or  its  financial  ability  to  respond  to  an  increase  in 
wages,  is  irrelevant.  We  frankly  admit  that  we  were  very 
much  startled  when  this  proposition  was  first  advanced.  On 
reflection,  we  can  see  clearly  that  if  the  employer  was  a private 
corporation,  engaged  in  a private  business,  its  financial  condi- 
tion would  be  irrelevant,  because  it  has  the  power  to  fix  the 
price  of  its  product,  and  it  could  either  include  in  the  price 
of  its  product  the  reasonable  cost  of  production,  or,  if  it  pre- 
ferred, it  could  retire  from  business  without  subjecting  itself 
to  penalty.  Neither  of  these  alternatives  is  open  to  this  com- 
pany. It  must  operate  its  railway  system  at  a price  fixed  by 
public  authorities.  Since  the  contract  embodied  in  the  Tayler 
ordinance  was  entered  into,  the  company  has  sold  to  the  public 
about  $14,000,000  of  stock.  All  this  has  been  paid  for  at  par 
or  more,  the  purchasers  relying  upon  the  statement  in  the 
ordinance  that  it  was  “a  contract  which  would  secure  to  The 
Cleveland  Railway  Company  unimpaired  the  capital  value 
described  in  section  16  hereof,”  etc. 

15 


We  suppose  this  Board  should  be  governed  by  the  ordin- 
ary principles  of  equity  which  govern  courts.  One  of  these 
principles  is  that  a court  will  not  order  a thing  done  which  is 
either  inequitable  or  impossible  of  performance.  The  Cleve- 
land Railway  Company  cannot  possibly  pay  additional  wages, 
maintain  its  capital  unimpaired,  and  pay  the  interest  to  the 
stockholders  which  the  ordinance  requires,  unless  the  city  in- 
creases the  rate  of  fare.  Under  the  ordinance,  it  is  just  as 
much  the  duty  of  the  Company  to  pay  to  the  stockholders  their 
6;%j  interest  as  it  is  to  pay  any  other  indebtedness  of  the  com- 
pany. 

Ever  since  Judge  Tayler’s  speech  in  February,  1910 
(Exhibit  No.  8),  just  before  the  ordinance  took  effect,  rely- 
ing upon  the  fundamental  principles  that  he  stated,  every  share 
of  stock  of  the  approximately  $14,000,000  sold  to  the  public 
has  been  bought  with  the  express  understanding  that  the  in- 
vestment should  not  be  in  any  wise  impaired ; in  other  words, 
that  a stockholder,  be  he  either  a large  or  a small  holder,  is 
entitled  to  have  his  investment  protected  in  such  a way  that, 
if  he  desires  to  change  the  investment,  the  Cleveland  market 
(which  is  practically  the  only  market  for  this  stock)  would 
readily  absorb  it  at  par.  The  company  cannot  sell  its  stock 
for  less  than  par.  The  company  can  pay  only  6%  upon  its 
stock,  and  it  has  thus  far  not  sought  to  increase  that  rate  of 
interest.  Whether,  if  the  war  continues  for  any  great  length 
of  time,  money  can  be  secured  with  which  to  make  the  neces- 
sary improvements  and  extensions  that  must  sooner  or  later 
be  demanded  by  the  community,  at  an  interest  rate  of  6%, 
remains  to  be  seen.  If  we  come  to  the  time  when  we  must 
pay  more  than  6%  for  money,  then  we  shall  have  to  pay  the 
going  rate  to  every  stockholder,  to  protect  his  investment. 
Some  one  says  at  once  that  we  might  have  two  kinds  of 
stock, — pay  the  old  stockholder  6%;  and  get  permission  of  the 
city  to  sell  new  stock  at  the  going  rate,  say  seven  or  eight  per 
cent.  This  is  a specious  and  fallacious  argument,  because  the 
minute  you  should  offer  a new  stock  at  seven  or  eight  per  cent 
you  would  distinguish  between  the  two  stocks,  and,  were 
money  worth  seven  or  eight  per  cent,  the  old  stockholder,  who, 
by  the  terms  of  the  ordinance,  has  been  assured  of  the  integrity 
of  his  investment,  and  who  has  been  assured  as  well  by  every- 
body who  has  handled  the  stock  and  by  the  city  itself  which 
has  urged  its  sale  that  the  investment  would  be  unquestionably 
safe,  would  find,  on  putting  his  stock  on  the  market,  that  it 
would  bring  only  from  60  to  75  cents  on  the  dollar, — that  the 
integrity  of  his  investment  had  been  impaired.  This  consid- 
eration leads  us  to  say,  and  we  wish  it  understood,  that  the 
company  may  have  to  apply  to  the  city  for  an  increased  rate 
to  be  paid  for  new  money  required,  and  also  upon  the  old 

16 


money,  in  order  to  maintain  the  integrity  of  the  investment, 
to  which  the  faith  of  everybody  concerned  is  committed. 

As  before  stated,  the  ordinance  fully  protects  the  city 
under  all  contingencies,  because,  should  the  rate  of  interest 
fall,  the  city  has  two  remedies, — the  right  to  purchase  at  110 
and  the  right  to  compel  the  company  to  assign  its  franchise  to 
another  person  that  will  furnish  the  money  at  a lower  rate. 
The  company  has  no  protection  except  the  pledged  faith  of 
the  city,  and  it  certainly  cannot  buy  money  for  its  uses  with- 
out paying  what  money  is  worth  and  what  it  commands. 

It  will  be  noted  that  this  entire  ordinance  is  built  upon 
the  theory  and  guaranty  of  paying  interest  on  invested  capital 
at  the  rate  of  six  per  cent  per  annum,  as  stated  in  the  sections 
hereinbefore  referred  to.  It  provides  simply  for  the  payment 
of  interest  upon  money  borrowed  and  upon  the  invested  capital, 
and  it  is  this  interest  rate  that  must  be  protected.  The  word 
“dividend”  is  used  once  or  twice  in  the  ordinance  in  an  ambig- 
uous way,  but  a dividend,  in  the  ordinary  sense  of  the  term, 
is  paid  out  of  surplus  earnings,  and  dividends,  as  such,  are 
entirely  abrogated  by  the  ordinance,  in  its  preamble,  by  its 
phraseology,  and  by  Judge  Tayler’s  declaration.  The  invested 
capital  is  to  be  protected  and  interest  paid  upon  it,  and  this 
whether  it  is  earned  or  not.  So  that  the  directors  of  The 
Cleveland  Railway  Company,  since  the  ordinance  in  question 
went  into  effect,  have  never  been  declaring  dividends.  They 
have  simply  been  paying  interest  as  commanded  by  the  terms 
of  the  ordinance.  They  were  advised  that  “dividends”  would 
always  have  to  be  paid  out  of  earnings,  and  that  any  payment 
of  dividends  other  than  out  of  earnings  would  subject  the 
directors  to  liability,  whereas  this  franchise  ordinance  provides 
for  a sort  of  teeterboard  in  arriving  at  cost  of  service.  It  was 
expected  that  sometimes  earnings  would  be  above  and  some- 
times below  an  amount  sufficient  to  pay  this  interest ; if  above 
a point  more  than  enough  to  pay  the  interest,  the  fare  was  to 
be  lowered ; if  less  than  sufficient  to  meet  the  interest,  the  fare 
was  to  be  put  up ; making,  as  it  is  plain  to  see,  a regular  swing- 
ing of  the  pendulum.  Therefore,  in  this  instance,  the  terms 
“interest”  and  “dividend”  are  by  no  means  synonymous.  Fare 
adjustments  are  provided  for  in  the  ordinance  so  as  to  get 
service  at  cost,  which  cost  was  to  include  interest  as  one  of  its 
component  parts.  This  distinction  between  interest  and  divi- 
dends should  be  borne  in  mind.  Of  course,  a dividend  is  what 
the  statute  contemplates  shall  be  declared  and  paid  by  directors 
out  of  profits,  but  Judge  Tayler’s  idea  was  to  get  clear  away 
from  the  theory  of  dividends  and  provide  instead  a stable  rate 
of  interest  that,  in  his  judgment  at  that  time,  was  sufficient 
to  induce  the  investment  of  money  necessary  to  properly  carry 
on  the  street  railway  enterprise. 

The  delay  of  the  city  in  responding  to  the  necessity  of 

17 


an  increased  rate  of  fare  in  order  to  maintain  the  integrity  of 
invested  money,  and  to  enable  the  company  to  pay  its  6% 
without  diminishing  service,  is  alarming  to  the  whole  com- 
munity. We  call  special  attention  to  Exhibits  10,  11  and  12 
attached  hereto:  First,  to  the  letter  of  Mr.  J.  R.  Nutt,  Pres- 
ident of  The  Citizens  Savings  and  Trust  Company;  next  to 
the  letter  of  Mr.  F.  H.  Goff,  President  of  The  Cleveland  Trust 
Company ; and  next  to  the  letter  of  Mr.  J.  A.  House,  President 
of  The  Guardian  Savings  and  Trust  Company.  These  trust 
companies,  in  their  capacity  as  trustees,  are  perhaps  the  largest 
holders  of  stock  of  the  railway  company.  They  have  been 
interested  in  placing  trust  funds  in  the  stock,  relying  upon  the 
faith  of  the  community,  and  hope  to  continue  to  do  so,  because 
they  are  in  a position  to  realize  the  necessities  of  this  city  and 
its  suburbs  as  a growing  community. 

Attention  is  also  called  to  an  interview  with  Judge  Hadden 
(Exhibit  No.  13),  who,  as  probate  judge  in  this  county  for 
many  years,  honored  and  respected  by  every  one,  has  advised 
trustees  to  invest  in  street  railway  stock.  In  other  words,  the 
entire  community  having  knowledge  of  financial  matters  has 
endeavored  to  help  to  carry  out  the  spirit  in  which  Judge 
Tayler  acted  in  the  drafting  of  the  Tayler  ordinance. 

We  want  to  challenge  the  serious  attention  of  the  Board 
for  a moment  to  the  tendency  prevailing  in  latter  years  towards 
the  destruction  of  property  by  commissions  and  boards.  The 
right  to  property  is  one  of  the  most  sacred  rights  of  any  free 
people,  and  if  a state  is  to  command  respect  for  long,  its 
pledged  faith  as  respects  property  rights  must  be  rigidly  kept. 
We  have  noted  in  late  years  the  rapid  multiplication  of  com- 
missions and  boards,  and  it  is  being  realized  today  that  great 
investments  and  properties  have  been  ruined  by  adverse  legis- 
lation, and  by  hostile  action  on  the  part  of  such  commissions 
and  boards.  But  nothing  is  sadder  than  the  condition  our 
country  finds  itself  in  at  the  present  time  by  the  maltreatment 
of  its  railroads  owing  to  such  adverse  legislation  and  hostile 
action,  and  we  find  ourselves  so  handicapped  that  the  govern- 
ment is  having  to  take  hold  for  the  purpose  of  securing 
efficiency.  In  doing  so  many  statutes  are  being  violated  and 
rulings  of  commissions  ignored.  The  thoughtful  and  observ- 
ing person  notices  an  almost  equally  ruthless  treatment  of 
other  properties. 

Years  ago,  among  the  very  first  of  states  to  create  com- 
missions, was  Massachusetts,  and  we  were  all  impressed  with 
the  ability  with  which  the  Commissioners  were  doing  their 
work.  We  seized  upon  it  as  a new  idea.  We  believed,  and 
still  believe,  that  the  men  upon  the  commission  were  con- 
scientious; but  it  would  be  hard  to  find  any  greater  injustice 
than  has  been  perpetrated  in  Massachusetts  under  the  guise 
of  the  Massachusetts  Commission.  Many  of  our  local  commis- 

18 


sions,  if  not  some  of  our  federal  commissions,  were  organized 
along  the  line  of  the  Massachusetts  commission,  but  we  wish 
to  call  attention  to  one  example  that  is  so  alarming  that  it 
demands  the  thoughtful  consideration  of  everyone.  Attached 
hereto  as  Exhibit  No.  14  is  a copy  of  a letter  written  April  8th 
to  the  Treasurer  of  The  Cleveland  Railway  Company,  Mr. 
H.  J.  Davies,  by  Mr.  H.  L.  Wilson,  Treasurer  of  the  Boston 
Elevated  Railway  Company.  Upon  reading  that  letter  it  will 
be  noted  that  the  Boston  Elevated,  by  order  of  the  commis- 
sion, sold  $3,300,000  of  its  stock,  and  that  the  public  paid  $155 
a share  for  it.  They  next  put  out  $6,650,000,  and  the  public 
was  required  to  pay  $110  per  share.  The  next  issue  was  for 
$4,000,000,  for  which  the  public  paid  $105  a share.  Some  of 
this  last-mentioned  stock  was  not  sold.  The  total  outstanding 
stock  of  the  company  was  $23,879,400.  The  premium  realized 
on  the  stock  sold  amounted  in  the  aggregate  to  $2,707,428.13 ; 
and  yet,  under  the  statutes  of  Massachusetts  and  the  rulings 
of  the  commission,  the  company  has  only  been  permitted  to 
make  earnings  to  such  an  extent  that  a few  months  ago,  as 
Mr.  Wilson  states  in  his  letter,  the  stock  was  selling  at  $27 
a share.  In  other  words,  the  people  who  at  one  time  had  been 
required  to  pay  $155  per  share,  could  realize,  if  they  wished 
to  turn  their  investment  into  money,  but  $27  a share.  To 
speak  plainly,  it  would  be  hard  to  find  a greater  injustice  done 
to  a stockholder  or  to  any  person  through  the  action  of  legis- 
lature and  commission.  It  is  our  desire  to  challenge  at  the 
outset  thoughtful  consideration  of  underlying  economic  prin- 
ciples that  neither  legislature  nor  commission  can  continue  to 
violate  with  impunity. 

We  have  heard  suggestions  of  a zone  system  being  a 
panacea,  and  the  city  is  talking  to  us  about  the  application  of 
a zone  system.  The  company  is  ready  at  all  times  to  make 
experimental  trials  in  the  working  out  of  any  reasonable  plan 
that  promises  success,  but  at  the  same  time  we  must  ask  of  the 
city  permission  to  increase  the  rate  of  fare  in  order  to  main- 
tain the  integrity  of  investments  made  and  to  be  made.  Just 
as  soon  as  the  interest  fund  increases  beyond  a certain  amount, 
and  just  as  soon  as  it  is  demonstrated  that  the  rate  of  fare  is 
more  than  sufficient  to  render  proper  service,  the  rate  of  fare 
must  come  down;  and  although,  as  we  have  said,  we  do  not 
approve,  as  a fundamental  economic  proposition,  the  contract 
between  the  company  and  the  city  to  render  service  at  cost 
and  no  more,  such  cost  to  include  interest  upon  capital,  the 
situation  in  Cleveland  is  such  that  every  energy  of  the  com- 
pany and  of  its  officials  is  exerted  to  make  it  a success. 

The  objections  to  the  zone  system  are  many.  You  can- 
not absolutely  lose  sight  of  the  fact  of  what  the  traffic  will 
bear.  Neither  in  any  American  city  do  we  want  to  lose  sight 
of  the  principle,  which  we  believe  is  a part  of  American  civiliza- 

19 


tion,  that  all  employes  shall  be  encouraged  to  own  their  own 
homes;  that  all  of  our  citizens,  so  far  as  possible,  shall  be 
encouraged  to  own  their  own  homes;  that  crowded  and  un- 
healthy tenements  shall  not  be  fostered;  that,  in  order  to 
further  and  improve  sanitary  conditions,  people  must  have 
cheap  fares  and  frequent  service.  Undoubtedly  some  benefit 
can  come  through  readjusting  the  peak,  and  your  Board  may 
be  able  to  help  in  this.  The  company  is  willing  to  lend  its 
assistance  to  the  utmost.  The  city  of  Cleveland  can  do  some- 
thing with  reference  to  it.  We  think  it  very  likely  that  some 
kind  of  a zone  system  must  be  worked  out,  but  it  must  be  a 
plan  that  will  take  into  consideration  all  elements,  and  not 
simply  the  element  of  service  at  cost.  It  must  regard  the  health 
of  the  people;  it  must  have  reference  to  what  the  traffic  will 
bear ; it  must  look  to  the  development  of  the  community ; it 
must  provide  for  the  building  of  many  new  lines  which  may, 
for  the  time  at  least,  be  experimental  and  unprofitable ; it  must 
have  in  view  the  proper  maintenance  of  the  property.  The 
development  off  any  community  is  seriously  handicapped  unless 
all  of  these  things  are  taken  into  account. 

Attached  hereto  is  a letter  from  the  Mayor  of  the  city  of 
Cleveland  to  the  city  council  (Exhibit  No.  15),  together  with 
the  reply  made  by  Mr.  Stanley  on  behalf  of  the  company  (Ex- 
hibit No.  16),  to  which  reply  we  invite  the  careful  considera- 
tion of  the  Board.  We  also  call  attention  to  the  action  of  the 
Chamber  of  Commerce  (Exhibit  No.  17)  bearing  upon  an 
increase  of  the  rate  of  fare.  We  ask  the  closest  investigation, 
by  any  expert  the  Board  may  select,  into  actual  conditions 
here,  with  the  assurance  that  we  want  to  do  everything  pos- 
sible that  will  give  to  our  employes  a fair  living  wage.  We 
believe  this  company  has  always  stood  well  when  compared 
with  others  in  its  relations  with  employes.  It  is  our  aim  to 
treat  them  fairly  and  justly,  and  they  and  the  public  must  be 
fair  and  just  with  us.  While  we  know  that  this  Board  has 
no  power  to  increase  the  rate  of  fare,  we  do  believe  that,  after 
careful  investigation,  a recommendation  or  suggestion  to  the 
city  that,  in  order  to  permit  us  to  keep  faith  and  the  city  to 
keep  its  faith,  the  rate  of  fare  should  be  increased  to  properly 
meet  all  costs  and  render  reasonable  service  will  have  great,  if 
not  preponderating,  weight  in  bringing  about  the  result  which 
is  so  much  desired  and  which  good  faith  requires. 

At  your  suggestion,  we  have  collected  data  bearing  upon 
wages  paid  and  increases  made  in  other  lines  of  employment. 
Such  as  we  have  been  able  to  gather  are  contained  in  Exhibit 
No.  18,  attached  to  and  made  a part  of  this  statement.  The 
figures  showing  the  wages  in  1910  in  other  occupations  than 
street-railroading  were  obtained  by  us  from  the  testimony  of 
Mr.  Harry  D.  Thomas,  Secretary  of  the  Cleveland  Federation 
of  Labor,  in  our  wage  arbitration  of  June,  1910;  the  figures 

20 


for  1918  are  those  fixed  June  1st  of  this  year  by  agreement 
between  the  employers  and  employes  in  the  building  trades 
in  Cleveland  after  a strike  that  lasted  several  months.  The 
table  shows  that  the  railway  company,  between  March  1,  1910, 
when  it  resumed  the  operation  of  its  railroad  after  the  receiver- 
ship, and  May  1,  1917,  when  its  last  wage  agreement  with  its 
motormen  and  conductors  was  made,  advanced  wages  41%, 
while  the  average  increase  in  the  other  occupations,  including 
the  advances  of  June  i,  1918,  has  been  60%.  An  advance  of 
60%  to  our  trainmen  over  the  average  wage  of  24  cents  per 
hour  that  they  were  receiving  in  1910  before  the  company 
resumed  possession  of  its  property  would  bring  the  average 
wage  now  to  38.4  cents.  The  same  advance  over  the  average 
wage  paid  June  1,  1910  (25  cents  per  hour),  would  give  them 
now  40  cents.  The  other  part  of  Exhibit  No.  18  shows  the 
wages  of  steam-railroad  employes  fixed  by  the  Director- 
General  of  the  United  States  Railroad  Administration  by 
General  Order  No.  27 — a business  more  nearly  like  the  street- 
railway  business  than  any  of  the  others  shown  in  Exhibit 
No.  18-a.  The  figures  are  taken  from  page  13  of  General 
Order  No.  27,  which  was  published  May  25,  1918,  and  they 
indicate  that  if  the  same  increase  in  wages  were  allowed  our 
men  as  are  allowed  in  that  order  to  the  steam-railroad  men, 
conductors  and  motormen  who,  on  the  31st  of  December,  1915, 
received  29  cents  per  hour  would  be  raised  to  41  cents  per 
hour,  and  those  who  then  received  32  cents  per  hour,  the 
maximum  then  paid,  would  be  advanced  to  45j4  cents  per 
hour.  We  believe  that  the  testimony  indicates  that  a smaller 
advance  should  be  made  to  our  trainmen  than  has  been  made 
to  the  steam-railroad  men,  for  reasons  that  we  have  stated. 

There  is  a vast  mass  of  printed  data,  untabulated  and 
undigested,  on  the  subject  of  increases  in  the  cost  of  living. 
You  are  undoubtedly  better  informed  on  the  subject  than  we 
are,  and  can  more  readily  place  your  hands  upon  authoritative 
government  statistics.  We  venture,  however,  to  include  in 
this  statement,  as  Exhibit  No.  20,  a table  from  Bradstreet’s 
of  June  15,  1918,  showing  “Bradstreet’s  Weekly  Food  Index” 
for  each  week  of  this  year  and  each  corresponding  week  of 
1917.  It  is  made  up,  we  understand,  by  adding  together  the 
market  prices  per  pound  of  thirty-one  articles  of  food  and 
dividing  the  sum  of  the  thirty-one  prices  by  the  number  of 
articles,  the  average  so  obtained  being  the  index  number  or 
price.  The  table  indicates  an  average  advance  in  food  prices 
of  less  than  20%  over  last  year.  Our  trainmen  ask  an  ad- 
vance in  wages  of  71%  over  last  year’s  wages.  It  indicates 
also  a gradual  decrease  in  average  prices  since  the  beginning 
of  1918. 

We  submit  these  exhibits  with  the  assurance  that  any- 
thing else  we  can  do  or  furnish  to  aid  the  commission  in 


21 


arriving  at  a just  result  will  be  done  or  furnished.  We  wish 
to  do  everything  we  can  to  try  out  to  its  most  logical  conclu- 
sion the  giving  of  service  at  cost,  but  primarily  we  must 
keep  intact  the  undertakings  already  incurred,  and  not  have 
new  ones  imposed  upon  us  until  the  fulfillment  of  our  old  ones 
shall  have  been  assured.  We  do  not  believe  the  people  of 
Cleveland  are  today  getting  the  service  they  ought  to  have, 
but  we  must  be  content  to  give  such  as  it  is  possible  to  render 
in  the  conditions  obtaining.  We  would  be  very  reluctant  to 
be  driven  to  the  necessity,  either  through  arbitration  or  other- 
wise, of  cutting  the  service  further. 

In  conclusion,  we  urge  that,  in  view  of  the  provisions 
of  our  unique  franchise,  under  which  the  higher  the  cost  of 
service  the  higher  the  rate  of  fare  that  must  be  paid  by  the 
hundreds  of  thousands  of  car-riders  of  Cleveland  and  vicinity, 
in  view  of  the  financial  condition  of  the  company,  in  view  of 
the  advances  in  wages  already  granted  to  our  trainmen  and 
of  the  nature  of  their  employment,  in  view  of  the  recommenda- 
tion of  the  government’s  Wage  Scale  Commission  “that  the 
existing  hours  of  service  in  effect  on  the  railroads  should  be 
maintained  for  the  period  of  the  war,”  in  view  of  the  advances 
shown  in  rates  of  wages  in  other  employments  and  in  the 
cost  of  living,  and  in  view  especially  of  the  principles  and 
policies  announced  by  you,  changes  in  working  conditions  that 
will  necessitate  the  employment  by  us  of  36%  more  men  to 
do  the  work  we  are  now  doing  imperfectly,  without  any  in- 
crease in  earnings  or  decrease  in  the  amount  of  our  operating 
expenses,  but,  on  the  contrary,  with  an  increase  of  more  than 
$100,000  in  expenses  apart  entirely  from  any  increase  in 
wages,  should  not  be  permitted,  and  the  demand  of  the  union 
that  wages  be  advanced  from  the  present  rates  of  32  and  35 
cents  per  hour  to  a flat  rate  of  60  cents  per  hour  should  be 
refused  and  the  Company’s  offer  of  a flat  rate  of  40  cents  per 
hour  from  November  1,  1917,  to  May  1,  1919,  approved;  and 
that,  in  conformity  with  the  action  of  the  government  in  the 
case  of  the  steam  railroads,  if  you  allow  any  increase,  your 
award  be  conditioned  upon,  or  recommend,  an  increase  in 
the  rate  of  fare  sufficient  to  enable  us  to  comply  with  the 
award. 

Respectfully  submitted, 

THE  CLEVELAND  RAILWAY  COMPANY, 
By  Squire,  Sanders  & Dempsey,  Its  General  Counsel. 


22 


: 

t 

.... 

| j | j 

N ; j j 

k»^4|‘~" j-j  • t 

4 ~ i 1'- ’ j 

j | {.  ; 

j ! S 

■ 1 

•■'■■:  ■■■■•■•■■:•".■■,'.■  ..  ..  ■ 

P .•  'vSfc  -s^kss^N 

■ 1 ■ 

«jNv*Vsi  -lv 
1,  ^-\K\\  V.A  ^Vs  i 

K ' j*  7*^ 

* — , I ~ j 

\rrjjjji  : j 

___! i. 




«! _ 


-r- 


•■  i- 


: t_±i 

<■  ■ i 


>W4"':|  P-:^] 


i£S\\$N 


jbbL 


1” 


i -X  ^ hnr-d  I | 

I 1 


— t 


i i * 

; - % 

I /Z 

r 

} - 


H 


IL. 


IrrPV^ 


. 


u 


n 


CU 


JjLiij. 

otjtV 


M 

j t 

SiS  » i 

r “ 4 ■■.:  ’ 

l r — A 

B 

i 1.— 


e>IA\ 


«>  1,  '4  \ «;,  $.,'■; 


arriving  at  a just  result  will  be  done  or  furnished.  We  wish 
to  do  everything  we  can  to  try  out  to  its  most  logical  conclu- 
sion the  giving  of  service  at  cost,  but  primarily  we  must 
keep  intact  the  undertakings  already  incurred,  and  not  have 
new  ones  imposed  upon  us  until  the  fulfillment  of  our  old  ones 
shall  have  been  assured.  We  do  not  believe  the  people  of 
Cleveland  are  today  getting  the  service  they  ought  to  have, 
but  we  must  be  content  to  give  such  as  it  is  possible  to  render 
in  the  conditions  obtaining.  We  would  be  very  reluctant  to 
be  driven  to  the  necessity,  either  through  arbitration  or  other- 
wise, of  cutting  the  service  further. 

In  conclusion,  we  urge  that,  in  view  of  the  provisions 
of  our  unique  franchise,  under  which  the  higher  the  cost  of 
service  the  higher  the  rate  of  fare  that  must  be  paid  by  the 
hundreds  of  thousands  of  car-riders  of  Cleveland  and  vicinity, 
in  view  of  the  financial  condition  of  the  company,  in  view  of 
the  advances  in  wages  already  granted  to  our  trainmen  and 
of  the  nature  of  their  employment,  in  view  of  the  recommenda- 
tion of  the  government’s  Wage  Scale  Commission  “that  the 
existing  hours  of  service  in  effect  on  the  railroads  should  be 
maintained  for  the  period  of  the  war,”  in  view  of  the  advances 
shown  in  rates  of  wages  in  other  employments  and  in  the 
cost  of  living,  and  in  view  especially  of  the  principles  and 
policies  announced  by  you,  changes  in  working  conditions  that 
will  necessitate  the  employment  by  us  of  36%  more  men  to 
do  the  work  we  are  now  doing  imperfectly,  without  any  in- 
crease in  earnings  or  decrease  in  the  amount  of  our  operating 
expenses,  but,  on  the  contrary,  with  an  increase  of  more  than 
$100,000  in  expenses  apart  entirely  from  any  increase  in 
wages,  should  not  be  permitted,  and  the  demand  of  the  union 
that  wages  be  advanced  from  the  present  rates  of  32  and  35 
cents  per  hour  to  a flat  rate  of  60  cents  per  hour  should  be 
refused  and  the  Company’s  offer  of  a flat  rate  of  40  cents  per 
hour  from  November  1,  1917,  to  May  1,  1919,  approved;  and 
that,  in  conformity  with  the  action  of  the  government  in  the 
case  of  the  steam  railroads,  if  you  allow  any  increase,  your 
award  be  conditioned  upon,  or  recommend,  an  increase  in 
the  rate  of  fare  sufficient  to  enable  us  to  comply  with  the 
award. 

Respectfully  submitted, 

THE  CLEVELAND  RAILWAY  COMPANY, 
By  Squire,  Sanders  & Dempsey,  Its  General  Counsel. 


22 


\©C0O'©f'3f«5Tf<'O 

rt(000'^Hromt''0' 

t^POO"0(SOOTt<0 


<V5fOfO(^(N<NCS(N 
l/>  rO  ui 

CS « 00  O"  *H  r*j"  ir> 

O'OO'Ot't'NN 


25 


at  43c 77,322  at  43c 198,717 

at  44c 79,120  at  44c 203,338 

at  45c 80,918  at  45c 207,960 

at  60c 107,891  at  60c 277,280 


u 

r; 


tn 

t* 


£ 

5' 


g 

3 

3 


,V, 

tn  ^ 


% 


(y 
<yr 


- r | 

ffg  =: 


3 y 


§ 

a.  i 

Sd 

CV>  5 

cr  a 

■%3  » 

a-...  s 
•:.' 3 * 

ro  C 
:.  K 

ti 


£.  te  25 
•~>  "■  & 

=*  f‘  4 

© 


is- 

‘■J5 

-is 

c 

ST* 


s* 


3 * 
9 ij 


BROADWAY  WEEK  DAY 


m-m 

OO  :s"*w 


g.  £ 

* I 


r x>  h !»  5}  ?!  <r  . ‘ * 


• - ■ ■ .r 


-u  V - t -• 


1 


, b - 


r %b 

: • T'., 

% I & 


O' 

O' 

jj 

!*? 

sj  ^ 

B B 

O 

'4>  o 

3 

a I 

3 3 

CM  ' 

!SS| 

't*.  C« 

►p-  oo 

CV  i 

s>1  Ir'j  : 

C.V.-  '.v 

.VO  CO  i 

© - E 

H 

3 

£ 1.  :> 

x-» 

gg 

i 1H 

SB 

s 

* 

5 E.  ^ 

W 

w~' 

© 

Z3  “ 

1 

.o  £ £ 

'O  & £ 

BROADWAY  WEEK  DAY 


lag 
p OS 

E 

Saasa3aa3883sa8aaS8asa88S888M^88^aaa3888888883888888838888888ii^8888888888888888888 

auSoSusJ  So  So  So  SoS™SoSr 

S3S§3SS3S§SSSSlf3§SlSSsSS3S3S3SS33si3S  3a38§gS&3g3§g§S331§333 

S 

§3§3a3835383S§3ss33a333333335333333338  83333333333333333333333 

E 

S 

S 

a • 

E 

s 

S 

a 

E 

883333i3§3383388a3g  a i33Sss§s38g33&s3333s33§§i  3383s 

§ 

333833313S&833S33  3 S^SSSSSSSSSljSSSSSSSSSSSS  Biss 

II 

I 

!••• 
o=  = * 

I” 


TIME 

tc 

O 

fsISsSsssisi  SI  SSSSSaaS  psjpsHSSB^S  .8 

a 

333333131333  B 33133333  1333333333333333  3 

E 

S3  1 3 33333338ll33p3i33333^p  §|  8 

11 

§ 

HI  § 3 iP3HS3§§§33§33333ii333133  3|  5 

sssssagg 

E ■ 

|asi|313p38||13|l|||||||pllsiiSsSa§S  ^333  g 

asiiaa 

§ 

|§3§§33^S3333i§S33333iiipiip333§iii  i|§||S| 

Is 

E 

Siil8|9133S133SSS33S3383S3&8aB8833S333 

3&3§3S§§§3338833 

§ 

33833s§3333S3§8Ssi33§333ill3331333333§3 

33§33333§3333555i3 

II 

B 

i- 

u. . . 

I ' 


ill 

r 


. ! l’-f-  J-Kf‘v 

I I'll,  v JJJ  ftlMf !-»  SWJ  10 


% ; ^ r. 


%$%#**■* 


;s.x  • 


. 


S x 

-.«  fo  - ■ 


£2  jtfc  $ 2 S rc,  £ Z :z  a £ ?:  g J 

x?  -C^>  is  cv  A X - • ■ ■ I.c  » « • ■•:.  O •© 


^-7  1 


■ 


? r 


I: 


A.:' 


cv  v*v  .•«  .•♦  •**>  r»«AM  xM  t*  -m  I v - •«  c%i  r'J  .'?•  oi  *.M  ,-..» r^v%f\M  , w .•«  o 


SJ;  V; :;  f. 

*■».■*  A*’  -;'’c  SPSI 


3 ■ 0»5  :«  > CM  C'  O 5 O r.i  ,V  '<  :■>•  -•'  •>  tv  •< . 


. 1 * ® ■A*-'?  *1.  •>.  1 


r *$$££  ^‘i5f 


■ : 25213 

r ■ r-i  W f 


1111 


I Ml  s 


,.  r A t 

|.  i : 

"•  • •=  i 

I'  * : 

; >•■  /o  c 

X j 

t - -o  : 


^S^^sSSe?!^ 


I ) f *-?■ t vf  f xWf 


Mrasmt,  BKOVD/a  f i AT.EEK  D'/  * 3CHEL 


BROOKLYN  WEEK  DAY 


11 

83g33833SftSS#&S88833S!933333338:g833888S83*»3338S3SSS388888888888g888888888888  § 

aOOOaOaOOOvOO.ONOOOOOOOOOOOOOOOOOOOOOOOOOOOOOsOaOsOsOvOOO^^OOOOOsOOOOWOOOOv.O^^io^^^^^^^^^^ioiOiOiOiO^iO^^^^  uj 

8 

3«§2s  8^|§pga|i3ii^^gi§S8§3SS§i§3§^gSlllig§§li  § 

6 

5333§js  S 

§ 

II5 

1 gi&SSSgS&S^SS  i§ 

a 

11= 

i 111111381313551111  38 

333311 

■ § 

!IiSHH?5l35SI|IIlIIIS|llSlH||P|*  *88 

lilii 

a 

§p^!pspssii^ii|i!!iiiii!|!2ii§aa|§i 

a 

2§iii!iiil§lil^SaS8ssSS333S2g  II  s 

i38§§2aSS8S3S3B38SS39S3S 

a 

33S§S§83§S3si8§g§lis§33H3S§§SS  I 

133333332333333333333333 

ii 

| 

~~S=aa«V*V«V^ 

88*3  1 8 


iBPI5 


U 

I„, 


I 

ii 

h 


33IS 

U]t 


: : S8Sp S f m % M ? >-  5 *?«?: 8 S S ? ?.  « ? SSR^MSSk-  = -"  ?•  :=  '2  * 

•■■  ai.vwiwt!,,.  ->  -.'.a  fit.  ,\  .X'  30. « -1-  .f.  TO..-  ••  •-•  e .*2  ,'J/C  *■  <C  -C  ••*  • •.»  T.  Ii 

Uliisps  ..  .-■■■ 


‘ ‘ } 
! « 7 


£ f^o 

& Siss 


>;-  £ i ' % 

5o  I 


mi\$.  r ? 

%»■ 


c:.  «*>  <5  --  :v  •••“>»  a» o>»  *>«  rwt?& t*  *- 


• ? P s £ s & S % V p 5%  8 X :~  g Pi  - ;••:  3 £ 2 


o*  • -1  **o  <r  -r*  *r<if  * 


i* 


3 


III;  ■ ; . in 


gs 

O'C- 


I fflL 


si  mmHMmzBz  i 


£|& 

30 


e ff8&ggSHS$gggg 


. 


; « cv  ; .• 


I || 


ii™n 


sir ! & 


5 ! 


SssE5Sis?;eiii^iKpS5Kiiiss ; & i 


s” :?  ^‘S:  & -v:  •>?  "iT  •§£ 


?A1*  -<iOl iAH  BKOOKrA^.  Si^Xl  DV  h 'SJ -HBDflTK  btfpbOftSp  80r .j  r MVQOfTS  v*  AM  I ' DV  ?.  SCHKDS.i’E 


[OR  WEEK  DAY 


jj 


SuSuSoSoguSuSolSo 


ss  ?I|§i21sp?^iSS8S§3l§i8f^S8SSS322S3'ggHSiSSS3S3 


§33§§3S3333338li§33§s§Ss533§353  rrsr 


U SSa33s3333§3338333S333§3§33fpS3833333333s33^5333 


333333§33333§353333S;3s»3353333  5215 


I 


£ 


ps 


3ss 


II 


ISSaSSSsssli^SSsgsSSlsSS^SaSS^SsSSSSssSiSaSaaiSiSlSSSSSSSaiil 


33533333S333333 


r§ 


33ggSSgS§SSS3SS3SS3i53SSSIS2S3SSS3S5332SS35S§§?BBSi2S5SS3SBS35S5S 


||  ~^^»=™-S22oS^Sft»S^ 

sa-sj 


II 

SoSuSoSuSoSoSoSoSoSoSuSoSuSuSoSo 

uuuuuuuuuouuuuu 

s 

§ Ip-RSiiipe  s 

s 

3 333S3§p3§3S333§g3  S II 

B 

33331  1 33333333  p ss 

13333333838  SsPSSsISSSSSlSSaiissSlSSSSSSSa  s 

s 

23552  § 3333S133  13  55 

383S3333353  33333333333333333333333333333  5 

B 

33333s8§l333333s§§si3s§33pp 

pS33S3333§g3SS§  3 

sssllssissislsl 

s 

I5Sa33=S2S3S3*||||SS2|!3S||3S 

|3§S§Si§ii3SB333  S 

ssssaspasssass 

B 

iils!i|3SS2SSS3gSSSS!aa  .S§3S33sS3s§i3§§s3s332§a§33iSsa333333gs38S3S§3SS 

uu 

li|3SS§13SSSSS5 

S 

33333333S33333333333333  ^3§3333gp333333p3333§33333§3ig333p3§3g3333333 

333§iS33§33§33§ 

n 

-.~,.»..a:!a..sassas„sma,8„g^^^ 

fi! 

i- 
•8»  » » 

I- 


I 


I! 

II 

a| 

III 

l 


*P|I 


ts 

I- 

o=  = = 

l„ 


! 

H 

h 


EXHIBIT  No.  4. 

The  Cleveland  Railway  Company’s  Cleveland  Franchise. 

ORDINANCE  No.  16238  A 
as  amended  by 
ORDINANCE  No.  20890  B. 

Whereas,  The  Cleveland  Railway  Company  is  the 
owner  of  a system  of  street  railroads  within  the  city  of 
Cleveland;  and 

Whereas,  The  Forest  City  Railway  Company,  The 
Municipal  Traction  Company  and  The  Cleveland  Railway 
Company  are  parties  to  litigation  affecting  the  ownership  of 
various  unexpired  street-railroad  grants  for  lines,  all  of 
which  lines  are  now  operated  by  a receiver  appointed  by  the 
Circuit  Court  of  the  United  States  for  the  Northern  District 
of  Ohio,  Eastern  Division ; and 

Whereas,  It  is  the  common  desire  of  the  city  and  The 
Cleveland  Railway  Company  to  have  all  the  grants  of  street- 
railway  rights  in  the  city  of  Cleveland  now  outstanding  sur- 
rendered and  renewed  upon  terms  hereinafter  recited,  to  the 
end  that  the  rate  of  fare  may  be  reduced,  the  transfer  privi- 
leges made  definite,  and  the  right  of  the  city  as  to  regulation 
and  possible  acquisition  made  certain ; and 

Whereas,  It  is  agreed  that  a complete  re-adjustment  of 
the  street-railroad  situation  should  be  made,  upon  terms  that 
will  secure  to  the  owners  of  the  property  invested  in  street 
railroads  security  as  to  their  property,  and  a fair  and  fixed 
rate  of  return  thereon,  at  the  same  time  securing  to  the  pub- 
lic the  largest  powers  of  regulation  in  the  interest  of  public 
service,  and  the  best  street-railroad  transportation  at  cost, 
consistent  with  the  security  of  the  property,  and  the  cer- 
tainty of  a fixed  return  thereon,  and  no  more ; 

Now,  therefore,  be  it  ordained  by  the  council  of  the  city 
of  Cleveland,  State  of  Ohio,  that 

Section  1.  Wherever  in  the  following  ordinance  the 
words  “The  Cleveland  Railway  Company,”  “the  company” 
or  “said  company”  are  used,  they  shall  be  held  to  mean  and 
include  The  Cleveland  Railway  Company;  wherever  the 
words  “the  city”  are  used,  they  shall  be  held  to  mean  and 
include  the  city  of  Cleveland;  and  wherever  officers  of  the 
city  of  Cleveland  are  mentioned  by  the  name  of  their  office 
or  their  descriptive  designation,  such  description  shall  be 
held  to  mean  and  include  the  incumbents  of  any  offices  here- 
after created  performing  functions  similar  to  those  now  im- 
posed by  law  upon  the  officers  designated  herein. 

Wherever  in  this  ordinance,  except  in  Section  48,  the 
expression  “taking  effect  of  this  ordinance”  is  used,  it  shall 
be  held  to  mean  the  thirty-first  day  after  the  passage  and 

29 


due  publication  of  this  ordinance,  no  petition  for  its  sub- 
mission to  popular  vote  having-  been  presented  or  filed  in 
accordance  with  the  statute  in  such  case  made  and  provided, 
or,  if  such  petition  has  been  presented  or  filed,  the  day  fol- 
lowing the  official  ascertainment  that  a majority  of  the 
popular  vote  at  the  submission  of  this  ordinance  to  vote  has 
been  in  favor  of  this  ordinance. 

Sec.  2.  The  Cleveland  Railway  Company  is  hereby 
granted,  upon  the  conditions  herein  provided,  a renewal  un- 
til the  first  day  of  May,  1934,  of  the  right  to  maintain  and 
operate  its  existing  street  railroad,  by  single  or  more  tracks, 
as  the  same  now  exists  in  the  city  of  Cleveland,  with  all 
necessary  curves,  street  crossings,  connections,  turn-outs, 
cross-overs,  Y’s,  loops,  poles,  trolley-,  feed-,  span-  and  guy- 
wires,  equipment  and  other  appliances,  upon,  over  and  along 
the  following  streets,  parts  of  streets  and  other  public  ways 
and  places  in  the  city  of  Cleveland,  said  streets  being 
grouped  into  numbered  streets  east  of  the  north-and-south 
meridian,  numbered  streets  west  thereof,  named  streets  al- 
phabetically arranged,  and  private  rights-of-way : 

STREETS  EAST. 

East  2nd  Street,  from  Prospect  Avenue,  S.  E.,  to  Boli- 
var Road,  S.  E. 

East  3d  Street  (Wood  Street),  from  Superior  Avenue, 
N.  E.,  to  St.  Clair  Avenue,  N.  E. 

East  4th  Street,  from  Prospect  Avenue,  S.  E.,  to  Wood- 
land Avenue,  S.  E.,  and  Broadway,  S.  E. 

East  9th  Street  (Erie  Street),  from  St.  Clair  Avenue, 
N.  E.,  to  Woodland  Avenue,  S.  E. 

East  14th  Street  (Brownell  Street),  from  Euclid  Avenue 
to  Central  Avenue,  S.  E. 

East  22nd  Street  (Perry  Street),  from  Prospect  Ave- 
nue, S.  E.,  to  Cedar  Avenue,  S.  E. 

East  34th  Street  (Humboldt  Street),  from  Orange  Ave- 
nue, S.  E.,  over  Kingsbury  Run  Viaduct  and  approaches,  to 
Broadway,  S.  E. 

East  40th  Street  (Case  Avenue),  from  Prospect  Ave- 
nue, S.  E.,  to  Perkins  Avenue,  N.  E. 

East  48th  Street  (Huck  Avenue),  where  the  private 
right-of-way  of  the  company  abuts  on  the  same. 

East  49th  Street  (Petrie  Street),  from  Fleet  Avenue, 
S.  E.,  to  Hamm  Avenue,  S.  E. 

East  55th  Street  (Wilson  Avenue),  from  Broadway, 
S.  E.,  to  Lake  Erie. 

East  57th  Street  (Skinner  Avenue),  from  Lansing  Ave- 
nue, S.  E.,  projected,  to  Fleet  Avenue,  S.  E. 

East  65th  Street  (Norwood  Avenue),  from  Superior 
Avenue,  N.  E.,  to  Wade  Park  Avenue,  N.  E. 

30 


East  65th  Street  (Tod  Street),  from  Lansing  Avenue, 

S.  E.,  to  Fleet  Avenue,  S.  E.  . . 

East  66th  Street  (Dunham  Avenue),  from  Superior  Ave- 
nue, N.  E.,  to  Hough  Avenue,  N.  E. 

East  71st  Street  (Marcelline  Avenue),  from  Harvard 
Avenue,  S.  E.,  to  Lansing  Avenue,  S.  E.  . 

East  79th  Street  (East  Madison  Avenue),  from  Lexing- 
ton Avenue,  N.  E.,  to  Hough  Avenue,  N.  E 

East  83rd  Street,  from  Central  Avenue,  S.  E.,  to  Quincy 

Avenue,  S.  E.  _ o tv/t  c 

East  105th  Street  (Doan  Street),  from  L S.  & M.  b. 

R.  R.  to  Quincy  Avenue,  S.  E.  . 

East  118th  Street  (Anndale  Street),  from  Euclid  Ave- 
nue to  Wade  Park  Avenue,  N.  E 

East  123rd  Street  (Carabelli  Street),  from  Euclid  Ave- 
nue to  southerly  line  of  and  into  the  company’s  property  on 
East  123rd  Street. 

STREETS  WEST. 

West  3rd  Street  (Seneca  Street),  from  Lakeside  Ave- 
nue N.  W.,  to  Scranton  Road,  N.  W. 

’West  6th  Street  (Bank  Street),  from  Superior  Avenue, 
N.  W.,  to  and  into  the  private  right-of-way  near  Union 

DeP<West  9th  Street  (Water  Street),  from  Superior  Avenue, 
N.  W.,  to  and  into  a private  right-of-way  near  Union  Depot. 

West  14th  Street  (Jennings  Avenue),  from  the  south 
end  of  Central  Viaduct  approach  to  Brainard  Avenue  S.  W. 

West  25th  Street  (Pearl  Street)  and  Pearl  Road,  S.  W., 
from  Superior  Avenue,  N.  W.,  Viaduct  approach,  over  and 
across  Walworth  Run  Bridge  and  its  approaches,  and 
Brooklyn  Bridge  and  its  approaches,  to  the  southerly  line  of 
and  into  the  company’s  property  in  South  Brooklyn. 

West  28th  Street  (Hanover  Street,  then  Rhodes  Avenue), 
from  Detroit  Avenue,  N.  W.,  to  Franklin  Circle. 

West  35th  Street  (State  View  Road),  from  Pearl  Road, 
S.  W.,  to  southerly  line  of  and  into  the  company’s  property 
in  South  Brooklyn. 

West  41st  Street,  from  Clark  Avenue,  S.  W.,  to  Fulton 

Road,  S.  W.  . 

West  65th  Street  (Gordon  Avenue),  from  Detroit  Ave- 
nue, N.  W.,  to  Clark  Avenue,  S.  W. 

West  73rd  Street  (Ridge  Avenue),  from  150  ft.  north  of 
Clark  Avenue,  S.  W.,  to  Denison  Avenue,  S.  W. 

West  98th  Street  (Wellington  Street),  from  Lorain 
Avenue  to  northerly  line  of  and  into  the  property  of  the 
company  on  West  98th  Street. 

West  117th  Street  (Highland  Avenue),  from  Madison 
Avenue,  N.  W.,  to  the  north  line  of  and  into  the  company’s 
property  on  West  117th  Street. 

31 


NAMED  STREETS. 

Abbey  Avenue,  S.  W.  (Abbey  Street),  from  West  14th 
Street  to,  over  and  across  the  Abbey-Avenue  portion  of  the 
Central  Viaduct  to  Lorain  Avenue. 

Ansel  Road,  N.  E.  (Ansel  Avenue),  from  Hough  Ave- 
nue, N.  E.,  to  the  southerly  line  of  and  into  the  company’s 
property  on  Ansel  Road,  N.  E. 

Bolivar  Road,  S.  E.,  from  East  9th  Street  to  and  into  the 
property  of  The  Electric  Depot  Co. 

Bridge  Avenue,  N.  W.  (Bridge  Street),  from  West  25th 
Street  to  West  65th  Street. 

Broadway,  S.  E.  (Broadway),  from  the  common  street 
intersection  at  south  end  of  Central  Market  to  Pittsburg 
Avenue,  S.  E. 

Broadway,  S.  E.  (Broadway),  from  East  34th  Street  to 
East  93rd  Street,  and  across  East  94th  Street  and  East  96th 
Street,  where  the  private  right-of-way  of  the  company  lying 
north  of  Broadway,  S.  E.,  and  C.  & P.  R.  R.  right-of-way 
abuts  on  said  streets. 

Buckeye  Road,  S.  E (South  Woodland  Avenue),  from 
Woodland  Avenue,  S E.,  to  east  line  original  lot  No.  425 
(easterly  city  limits). 

Cedar  Avenue,  S.  E.  (Cedar  Avenue),  from  East  22nd 
Street  to  easterly  city  limits. 

Cedar  Boulevard  from  city  limits  to  city  limits. 

Central  Avenue,  S.  E.  (Central  Avenue),  from  East  83rd 
Street  to  the  northerly  approach  of  Central  Viaduct. 

Central  Viaduct,  from  Central  Avenue,  S.  E.,  to  West 
14th  Street. 

Champlain  Avenue,  from  Ontario  Avenue  to  West  3r^ 
Street. 

Clark  Avenue,  S.  W.  (Clark  Avenue),  from  West  14th 
Street  to  West  73rd  Street. 

Coltman  Road,  S.  E.  (East  End  Avenue  and  Coltman 
Street),  from  Euclid  Avenue  to  the  southerly  line  of  and 
into  the  company’s  property  on  Coltman  Road,  S.  E. 

Denison  Avenue,  S.  W.  (Denison  Avenue),  from  West 
25th  Street  to  Lorain  Avenue. 

Detroit  Avenue,  N.  W.  (Detroit  Street),  from  West 
25th  Street  to  center  of  West  117th  Street  (westerly  city 
limits). 

Eagle  Avenue,  S.  E.,  from  East  9th  Street  to  and  into 
the  property  of  The  Electric  Depot  Co. 

Euclid  Avenue,  from  Public  Square  to  and  into  the  pri- 
vate right-of-way  of  the  company  100  feet  west  of  East  22nd 
Street,  and  across  Brownell  Court,  S.  E.,  where  the  private 
right-of-way  100  feet  west  of  East  22nd  Street  abuts  on  said 
court. 


32 


Euclid  Avenue,  from  East  40th  Street  to  north  line  of 
original  lot  No.  397  (easterly  city  limits). 

Fairfield  Avenue,  S.  W.  (Fairfield  Street),  from  West 
10th  Street  to  West  14th  Street. 

Fleet  Avenue,  S.  E.  (Fleet  Street),  from  East  65th 
Street  to  East  49th  Street. 

Franklin  Circle,  through  the  Circle  from  West  28th 
Street  to  Fulton  Road,  N.  W. 

Fulton  Road,  N.  W.  and  S.  W.  (Rhodes  Avenue),  from 
Franklin  Circle  to  Denison  Avenue,  S.  W. 

Hamm  Avenue,  S.  E.  (Hamm  Street),  from  East  49th 
Street  to  Broadway,  S.  E. 

Harvard  Avenue,  S.  E.  (Harvard  Street),  from  East 
93rd  Street  to  East  71st  Street. 

High  Avenue,  from  East  2nd  Street  to  East  5th  Street. 

Hough  Avenue,  N.  E.  (Hough  Avenue),  from  East  66th 
Street  to  East  55th  Street. 

Hough  Avenue,  N.  E.  (Hough  Avenue),  from  East  79th 
Street  to  east  line  of  Ansel  Road,  N.  E. 

Huron  Road,  from  East  2nd  Street  to  East  4th  Street. 

Independence  Road,  S.  E.  (Independence  Street),  from 
private  right-of-way  at  East  47th  Street  to  Sykora  Road, 
S.  E. 

Kinsman  Road,  S.  E.  (Kinsman  Street),  from  Wood- 
land Avenue,  S.  E.,  to  east  line  of  original  lot  No.  441  (east- 
erly city  limits). 

Lake  Avenue,  N.  W.  (Lake  Avenue),  from  Detroit  Ave- 
nue, N.  W.,  to  private  right-of-way  in  Clifton  Road,  N.  W. 

Lakeside  Avenue,  N.  W.  (Lake  Street),  from  West  9th 
Street  to  West  6th  Street. 

Lakeside  Avenue,  N.  W.  (Lake  Street),  from  West  3rd 
Street  to  Ontario  Street. 

Lansing  Avenue,  S.  E.  (Fremont  Street),  from  East 
71st  Street  to  East  57th  Street. 

Lexington  Avenue,  N.  E.  (Lexington  Avenue),  from 
East  55th  Street  to  East  79th  Street. 

Lorain  Avenue  (Lorain  Street),  from  Abbey  Avenue, 
S.  W.,  to  west  line  of  original  lot  No.  14  (old  city  limits). 

Madison  Avenue,  N.  W.  (W.  Madison  Avenue),  from 
West  65th  Street  to  the  center  of  West  117th  Street  (west- 
erly city  limits). 

Miles  Avenue,  S.  E.  (Miles  Avenue),  from  Broadway, 
S.  E.,  to  east  line  of  original  lot  No.  465  (easterly  city 
limits). 

Ontario  Street  and  Ontario  Street,  'S.  E.  (Ontario 
Street),  from  Lakeside  Avenue,  N.  W.,  to  Central  Avenue, 
S.  E. 

Orange  Avenue,  S.  E.  (Orange  Street),  from  Broad- 
way, S.  E.,  to  East  34th  Street. 

33 


Payne  Avenue,  N.  E.  (Payne  Avenue),  from  Superior 
Avenue,  N.  E.,  to  East  55th  Street. 

Perkins  Avenue,  N.  E.  (Perkins  Avenue),  from  East 
55th  Street  to  East  40th  Street. 

Pittsburg  Avenue,  S.  E.  (Pittsburg  Street),  from 
Broadway,  S.  E.,  to  East  34th  Street. 

Professor  Street,  S.  W.  (Professor  Street),  from  West 
10th  Street  to  Starkweather  Avenue,  S.  W. 

Prospect  Avenue,  S.  E.  (Prospect  Street),  from  East 
40th  Street  to  Ontario  Street. 

Prospect  Avenue,  N.  W.  (Michigan  Street),  from  On- 
tario Street  to  West  3rd  Street. 

Public  Square  (Monumental  Park)  ; the  easterly  road- 
way from  Superior  Avenue,  N.  E.,  to  Euclid  Avenue;  the 
southerly  roadway  from  the  easterly  roadway  and  Euclid 
Avenue  to  the  westerly  roadway;  the  westerly  roadway 
from  the  southerly  roadway  to  Superior  Avenue,  N.  W. ; the 
westerly  roadway  from  Superior  Avenue,  N.  W.,  to  the 
northerly  roadway ; the  northerly  roadway  from  the  wester- 
ly roadway  to  and  across  the  easterly  roadway ; the  easterly 
roadway  from  the  northerly  roadway,  to  Superior  Avenue, 
N.  E. 

Quincy  Avenue,  S.  E.  (Quincy  Street),  from  East  55th 
Street  to  Woodhill  Road,  S.  E. 

Rockwell  Avenue,  N.  E.,  from  the  easterly  roadway  of 
the  Public  Square  (Monumental  Park)  to  East  3rd  Street. 

St.  Clair  Avenue,  N.  E.  and  N.  W.  (St  Clair  Street), 
from  West  9th  Street  to  east  line  of  original  lot  No.  365 
(easterly  city  limits). 

Scovill  Avenue,  S.  E.  (Scovill  Avenue),  from  East  9th 
Street  to  East  55th  Street. 

Scranton  Road,  N.  W.  and  S.  W.  (Scranton  Avenue), 
from  West  3rd  Street  to  Clark  Avenue,  S.  W. 

Sumner  Avenue,  S.  E.  (Sumner  Street),  from  East  9th 
Street  to  East  14th  Street. 

Superior  Avenue,  N.  W.  and  N.  E.  (Superior  Street), 
from  easterly  approach  of  Superior  Avenue,  N.  W.,  Viaduct 
at  West  9’th  Street  to  east  line  of  original  lot  No.  387  (old 
city  limits). 

Superior  Avenue,  N.  W.,  Viaduct  (Viaduct  Street), 
from  West  9th  Street  to  West  25th  Street. 

Sykora  Road,  S.  E.  (Sykora  Street),  from  Independence 
Road,  S.  E.,  southerly  to  and  into  private  property. 

Union  Avenue,  S.  E.  (Union  Street),  from  Broadway, 
S.  E.,  to  East  93rd  Street. 

Wade  Park  Avenue,  N.  E.  (Wade  Park  Avenue),  from 
East  118th  Street  to  East  65th  Street. 

Woodhill  Road,  S.  E.,  and  East  93rd  Street  (Woodland 
Hills),  from  Quincy  Avenue,  S.  E.,  to  Broadway,  S.  E. 

Woodland  Avenue,  S.  E.  (Woodland  Avenue),  from  the 

34 


common  street-intersection  at  the  southerly  end  of  Central 
Market  to  easterly  city  limits,  735  feet  east  of  the  center  of 
Woodhill  Road,  S.  E. 

PRIVATE  RIGHTS-OF-WAY. 

Private  right-of-way  crossing  Deering  Avenue,  S.  E., 
and  Fairchild  Avenue,  S.  E.,  and  through  Stearns  Road, 
S.  E.,  from  Euclid  Avenue  to  Cedar  Avenue,  S.  E. 

Private  right-of-way  from  Euclid  Avenue  and  across 
Brownell  Court,  S.  E.,  to  Prospect  Avenue,  S.  E.,  near  East 
22nd  Street. 

Private  right-of-way  in  Clifton  Road,  N.  W.,  crossing 
all  intersecting  streets,  from  Lake  Avenue,  N.  W.,  to  West 
117th  Street. 

Private  right-of-way  in  Lansing  Avenue  projected  from 
East  57th  Street  (Skinner  Avenue),  easterly  150  feet  along 
Lansing  Avenue  projected. 

In  the  private  right-of-way  north  of  and  parallel  with 
the  L.  S.  & M.  S.  R.  R.  right-of-way  from  West  95th  Street 
to  Lake  Avenue,  N.  W. 

CITY  TRACKS 

Of  the  rights  granted  in  the  foregoing  descriptions,  the 
following  are  over  tracks  and  appliances  belonging  to  the 
city  of  Cleveland : 

Central  Viaduct,  from  Central  Avenue,  S.  E.,  to  West 
14th  Street;  thence  along  West  14th  Street  to  Abbey  Ave- 
nue, S.  W.,  thence  along  Abbey  Avenue,  S.  W.,  to  the  west 
line  of  West  19th  Street. 

Champlain  Avenue,  from  Ontario  Street  to  West  3rd 
Street. 

East  2nd  Street,  from  Prospect  Avenue,  S.  E.,  to  Boli- 
var Road,  S.  E. 

East  3rd  Street  (Wood  Street),  from  Superior  Avenue, 
N.  E.,  to  St.  Clair  Avenue,  N.  E. 

East  4th  Street,  from  Prospect  Avenue,  S.  E.,  to  Wood- 
land Avenue,  S.  E.,  and  Broadway,  S.  E. 

High  Avenue,  from  East  2nd  Street  to  East  4th  Street. 

Huron  Road,  from  East  2nd  Street  to  East  4th  Street. 

Kingsbury  Run  Viaduct,  from  the  center  of  Trumbull 
Street,  S.  E.,  to  Pisek  Avenue,  S.  E. 

Kinsman  Road,  S.  E.,  Viaduct  over  the  tracks  of  the 
C.  & P.  R.  R.  Co. 

Public  Square  (Monumental  Park)  ; westerly  roadway, 
from  Superior  Avenue,  N.  W.,  to  the  northerly  roadway; 
northerly  roadway  from  the  westerly  roadway  to  and  across 
the  easterly  roadway,  easterly  roadway  from  the  northerly 
roadway  to  Superior  Avenue,  N.  E. 

Seneca  Street  Bridge  over  the  Cuyahoga  River  and  the 
C.,  T.  & V.  R.  R.  Co.’s  tracks. 

35 


Superior  Avenue,  N.  W.,  Viaduct,  from  West  9th  Street 
to  center  of  West  25th  Street 

Rockwell  Avenue,  N.  E.,  from  the  easterly  roadway  of 
the  Public  Square  (Monumental  Park)  to  East  3rd  Street; 
and  the  grant  to  use  said  tracks  and  appliances  is  subject  to 
the  provisions  of  Section  38  of  this  ordinance,  and  without 
prejudice  to  the  continuing  ownership  of  said  city  as  to  its 
tracks  and  appliances;  provided,  however,  that  the  city  of 
Cleveland-  having  expended  the  sum  of  $144,000  in  the  con- 
struction, reconstruction  and  relocation  of  tracks,  special 
work  and  overhead  equipment  of  the  north  and  south  tracks 
of  the  four  tracks  in  Superior  Avenue,  and  the  relocation  of 
the  two  middle  tracks  thereof,  from  the  center  of  Water 
Street  to  the  center  of  the  Public  Square,  and  all  the  tracks, 
special  work  and  overhead  equipment  around  the  south  half 
of  the  Public  Square,  and  through  the  Public  Square  on 
Ontario  Street  and  Superior  Avenue  from  Ontario  Street 
east  to  the  easterly  side  of  the  easterly  roadway,  in  which 
said  places  old  construction  belonging  to  The  Cleveland 
Railway  Company  was  removed,  and  the  new  structures  in 
which  are  now  the  property  of  The  Cleveland  Railway  Com- 
pany, and  further,  out  of  said  sum  of  $144,000,  constructed, 
where  no  tracks  had  previously  been,  the  tracks,  overhead 
equipment  and  special  work  in  and  connecting  with  the  fol- 
lowing streets,  which  said  tracks,  special  work  and  over- 
head equipment  are  the  property  of  the  city  of  Cleveland, 
namely,  East  2nd  Street,  from  Prospect  Avenue,  S.  E.,  to 
Bolivar  Road;  East  3rd  Street  (Wood  Street),  from  Supe- 
rior Avenue,  N.  E.,  to  St.  Clair  Avenue,  N.  E. ; East  4th 
Street,  from  Prospect  Avenue,  S.  E.,  to  Woodland  Avenue, 
S.  E,  and  Broadway,  S.  E. ; Champlain  Avenue,  from  Ontario 
Street  to  West  3rd  Street;  High  Avenue  from  East  2nd 
Street  to  East  4th  Street ; Huron  Road,  from  East  2nd  Street 
to  East  4th  Street;  Public  Square  (Monumental  Park), 
westerly  roadway  from  Superior  Avenue,  N.  W.,  to  the 
northerly  roadway;  northerly  roadway  from  the  westerly 
roadway  to  and  across  the  easterly  roadway;  easterly  road- 
way, from  the  northerly  roadway  to  Superior  Avenue,  N.  E. ; 
Rockwell  Avenue,  N.  E.,  from  the  easterly  roadway  of  the 
Public  Square  (Monumental  Park)  to  East  3rd  Street,  and 
the  city  of  Cleveland  owes  to  The  Cleveland  Railway  Com- 
pany the  sum  of  $55,000  for  money  and  materials  used  in 
part  of  said  work,  it  is  hereby  provided  that  the  company, 
as  compensation  for  the  right  to  use  said  tracks,  overhead 
equipment  and  special  work,  shall  annually  charge  off  of  the 
$55,000  owed  by  the  city  a sum  equal  to  interest  at  six  per 
cent,  per  annum  on  $89,000  until  said  entire  sum  of  $55,000 
shall  have  been  charged  off,  said  annual  charges  beginning 
January  1,  1908,  and  when  said  sum  shall  have  been  wholly 
charged  off  the  further  use  by  the  company  of  said  tracks, 

36 


appliances  and  special  work  shall  be  subject  to  the  provi- 
sions of  Section  38  of  this  ordinance. 

Sec.  3.  The  motive  power  for  the  operation  of  the 
company’s  railway  shall  be  electricity,  or  such  other  motive 
power  as  council  shall  approve,  the  construction  and  equip- 
ment first-class,  and  to  the  satisfaction  of  the  city.  The 
tracks  hereafter  laid  in  paved  streets,  either  as  new  construc- 
tion or  as  renewal  of  existing  construction,  shall,  with  re- 
spect to  their  style  and  construction,  conform  to  the  general 
ordinances  of  the  city,  as  the  same  now  are,  or  as  they  may 
be  hereafter. 

Sec.  4.  The  right  is  hereby  given  to  the  company  to 
maintain  its  present  lines  of  poles  and  wires,  and  to  erect 
and  maintain  such  other  lines  of  poles  and  wires  as  may  be 
necessary  to  connect  its  power-houses  and  its  said  street- 
railroad  system,  and  to  maintain  its  feeder  cables  as  at  pres- 
ent located  in  the  city-water-works  tunnel,  or  hereafter  lo- 
cated in  said  tunnel  or  other  tunnels  or  conduits  with  per- 
mission of  the  city,  and  upon  the  payment  by  the  company 
of  such  reasonable  annual  charge  as  the  city  may  from  time 
to  time  make  therefor  for  all  users  thereof,  and  to  maintain 
its  present  intake  and  discharge  water-pipes  and  intake  cribs 
between  its  power-house  on  Washington  Avenue,  N.  W., 
and  the  Cuyahoga  River,  and  such  other  intakes  as  may  be 
hereafter  authorized  by  said  city;  and  wherever  any  of  the 
routes  provide  for  or  include  private  right-of-way  or  prop- 
erty, the  company  is  granted  the  right  to  maintain  and 
operate  its  tracks  on  and  across  any  and  all  intervening 
streets,  and  to  maintain  all  poles  and  wires  necessary  to 
such  purpose. 

Sec.  5.  The  city  reserves  the  right  to  grant  to  any 
other  person  or  corporation  the  right  jointly  to  occupy  and 
use  for  street-railroad  purposes,  within  the  following  de- 
scribed territory,  the  whole  or  any  part  of  the  tracks,  poles, 
wires  and  electric  current  herein  authorized  to  be  main- 
tained and  operated,  and  all  other  appliances  and  power  now 
or  hereafter  used  for  street-railway  purposes,  said  territory 
being  known  as  the  central  district  of  the  city,  bounded  as 
follows : 

Beginning  at  the  shore  of  Lake  Erie  at  the  intersection 
of  the  east  line  of  East  12th  Street  projected  to  said  shore  of 
Lake  Erie;  thence,  along  the  east  line  of  said  East  12th 
Street  and  East  12th  Street  projected,  southerly  to  the 
southerly  line  of  Central  Avenue,  S.  E. ; thence  along  the 
southerly  line  of  Central  Avenue,  S.  E.,  to  the  southerly 
line  of  the  Central  Viaduct  and  its  approaches ; thence  along 
the  southerly  line  of  the  Central  Viaduct  and  its  approaches 
to  the  easterly  line  of  West  14th  Street;  thence  along  the 
easterly  line  of  West  14th  Street  to  the  southerly  line  of 
Abbey  Avenue,  S.  W.,  projected;  thence  along  the  southerly 

37 


line  of  Abbey  Avenue,  S.  W.,  projected,  and  the  southerly 
line  of  Abbey  Avenue,  S.  W.,  bridge  and  its  approaches  to 
the  southerly  line  of  Lorain  Avenue ; thence  along  the  south- 
erly line  of  Lorain  Avenue  to  the  westerly  line  of  West  25th 
Street;  thence  along  the  westerly  line  of  West  25th  Street 
to  the  southerly  line  of  Detroit  Avenue,  N.  W. ; thence  along 
the  southerly  line  of  Detroit  Avenue,  N.  W.,  to  the  westerly 
line  of  West  28th  Street;  thence  along  the  westerly  line  of 
West  28th  Street  and  along  said  westerly  line  projected  to 
its  intersection  with  Lake  Erie;  thence  along  the  southerly 
shore  of  Lake  Erie,  as  the  same  now  is  or  hereafter  may  be, 
to  the  place  of  beginning. 

The  right  of  joint  occupancy  and  use  herein  reserved 
shall  be  upon  such  reasonable  terms  and  conditions  as  the 
council  may  prescribe. 

Sec.  6.  The  construction,  rolling  stock,  equipment, 
maintenance  and  operation  of  the  street  railroads  herein 
authorized  shall  be  subject  to  and  governed  by  the  general 
street-railroad  ordinances  now  in  force,  except  as  the  same 
are  herein  modified,  and  by  future  ordinances  and  regula- 
tions of  the  city  not  inconsistent  herewith,  except  that  the 
company  shall  not  be  required  to  pay  any  car-license  fee. 

Sec.  7.  The  company  shall  maintain  in  constant  repair 
the  pavement  within  a space  seven  (7)  feet  in  width  for  sin- 
gle-track, and  for  double-track  the  entire  space  between  the 
outer  rails  of  both  tracks,  including  the  space  between  the 
two  tracks  and  one  foot  outside  of  each  outer  rail,  but  in  no 
event  to  exceed  eighteen  feet,  except  about  curves,  special 
work  and  where  there  are  more  than  two  tracks  in  a street, 
in  all  paved  streets  occupied  by  its  tracks,  whether  such 
streets  were  paved  at  the  time  of  the  passage  of  this  ordi- 
nance or  subsequently  thereto ; but  the  company  shall  not  be 
required  to  repave  by  virtue  of  this  obligation  to  repair,  nor 
by  virtue  of  any  requirement  of  the  general  ordinances  of 
the  city  of  Cleveland  during  the  continuance  of  this  grant. 

Sec.  8.  The  company,  at  once  upon  the  taking  effect  of 
this  ordinance,  shall  proceed,  by  the  acquisition  of  new  cars 
or  by  alteration  of  existing  cars,  to  extend  the  pay-enter  sys- 
tem of  fare  collections ; and,  in  case  it  is  able,  acting  in  good 
faith,  to  raise  the  money  so  to  do  within  five  months  from 
that  date,  the  company  shall  have  in  use  upon  its  system  not 
fewer  than  450  pay-enter  cars,  and  in  18  months  from  that 
date  shall  have  all  of  the  cars  operated  by  it  equipped  as  pay- 
enter  cars,  provided  that  small  open  cars  now  owned  by  the 
company,  not  in  excess  of  100  in  number,  may  be  continued 
in  use  by  the  company  as  trailers.  The  phrase  “pay-enter 
car,”  as  used  in  this  ordinance,  shall  be  held  to  mean  a car 
equipped  with  a fare-box,  and  so  arranged  as  effectively  to 
provide  for  the  prepayment  of  fares  by  passengers.  The 
expense  of  the  acquisition  of  such  pay-enter  cars,  and  seven- 

38 


ty-five  per  cent.  (75%)  of  the  cost  of  the  reconstructing  or 
remodeling  [of]  cars  owned  by  the  company  at  the  time  of 
the  taking  effect  of  this  ordinance  so  as  to  make  them  pay- 
enter  cars,  shall  be  added  to  the  capital  value  of  the  com- 
pany, as  defined  in  Sections  16  and  18  of  this  ordinance. 

Sec.  9.  The  company  shall  place  and  continue  upon  all 
of  its  lines  cars  of  modern  design,  equipped  and  furnished 
with  such  improvements  and  appliances  as  shall  be  deemed 
by  the  city  to  be  necessary  and  proper  for  the  safety,  con- 
venience and  comfort  of  the  passengers  and  the  public,  and 
shall  run  such  cars  in  such  numbers,  at  such  intervals  of 
time,  subject  to  the  limitation  hereinafter  provided,  and  un- 
der such  rules  and  regulations,  as  the  city  may  from  time 
to  time  require,  and  shall  cause  such  cars  to  stop  at  such 
places  as  the  city  may  designate  for  passengers  to  leave  or 
enter  the  same.  The  city  reserves  to  itself  the  entire  control 
of  the  service,  including  the  right  to  fix  schedules  and  routes, 
including  routes  and  terminals  of  interurban  cars,  the  char- 
acter of  the  cars,  the  right  to  increase  or  diminish  service, 
provided  only  that  the  council  shall  not  require  service  to 
an  extent  which,  at  the  maximum  rate  of  fare,  will  not  pro- 
duce, to  be  credited  to  the  interest  fund,  money  enough  to 
make  good  any  loss  therein,  and  to  meet  the  requirements  of 
Sections  16  and  18  hereof;  and  provided  further  that  when- 
ever, in  the  opinion  of  the  company,  any  resolution  or  ordi- 
nance of  the  council  regulating  service  will,  if  such  service 
be  installed  at  the  maximum  rate  of  fare  provided  in  Section 
22  hereof,  not  produce,  to  be  credited  to  the  interest  fund, 
money  enough  to  make  good  and  meet  the  requirements  of 
Sections  16  and  18  hereof,  then  and  in  any  such  event  the 
company  shall  at  once  install  such  service,  and  may  require 
the  question  whether  the  continuation  of  such  service 
would,  at  the  maximum  rate  of  fare,  impair  the  ability  of  the 
company  to  meet  the  requirements  of  Sections  16  and  18 
hereof,  to  be  submitted  to  arbitration  as  hereinafter  pro- 
vided ; and  if  the  board  of  arbitration  decide  that  such  serv- 
ice will  not  produce  the  moneys  needed  as  aforesaid,  then 
the  resolution  or  ordinance  shall  not  be  further  complied 
with  by  the  company,  and  the  company  shall  have  the  right 
to  recoup  any  losses  sustained,  in  the  manner  fixed  by  the 
board  of  arbitration  to  which  the  question  of  the  continua- 
tion of  such  service  has  been  submitted. 

Sec.  10.  Immediately  upon  the  taking  effect  of  this 
ordinance  there  may  be  designated  by  the  city  a city  street 
railroad  commissioner,  which  designation  shall  be  made  by 
the  mayor  of  the  city,  subject  to  the  approval  of  the  city 
council.  The  city  reserves  the  right,  at  any  time,  and  from 
time  to  time,  to  remove  the  street  railroad  commissioner 
designated  by  it,  such  removal  to  be  by  the  mayor,  and  to 
fill  the  vacancy  in  the  manner  provided  for  original  desig- 

39 


nation ; and  the  city  shall  forthwith  upon  the  naming-  of  any 
city  street  railroad  commissioner  notify  the  company  in 
writing  of  the  name  and  address  of  such  commissioner. 

The  city  street  railroad  commissioner  shall  act  as  the 
technical  adviser  of  the  council  of  the  city  of  Cleveland  in 
all  matters  affecting  the  interpretation,  meaning  or  applica- 
tion of  any  of  the  provisions  of  this  ordinance,  and  of  action 
thereunder  affecting  the  quantity  or  quality  of  service,  or  the 
cost  thereof,  or  the  rate  of  fare.  He  shall  keep  always  in- 
formed as  to  all  matters  affecting  the  cost  or  quality  or  quan- 
tity of  service  furnished,  the  receipts  and  disbursements  and 
property  of  the  company,  the  rate  of  fare,  the  vouchering  of 
expenditures ; and  if  he  disapproves  of  the  vouchering  of 
expenditures,  or  of  the  manner  of  keeping  accounts,  or  other 
matter  affecting  the  bookkeeping  of  the  company,  he  shall 
at  once  take  the  matter  up  with  the  company;  and  in  case 
of  disagreement  the  matter  shall  at  once  be  submitted  to  the 
committee  on  standard  classification  of  accounts  of  the 
American  Street  and  Interurban  Railway  Accountants’ 
Association,  or  to  such  person  or  persons  upon  whom  the 
regulation  of  such  matters  may  from  time  to  time  be  de- 
volved by  law;  and  the  decision  of  such  committee,  or  per- 
son or  persons,  not  inconsistent  with  the  provisions  of  this 
ordinance,  to  whom  this  question  is  thus  submitted,  shall  be 
final. 

In  the  case  of  any  temporary  absence  or  disability  of 
the  city  street  railroad  commissioner,  the  mayor  may  desig- 
nate someone  to  act  in  his  stead,  notice  being  given  to  the 
company  as  heretofore  provided. 

The  president  of  the  company,  or,  in  his  absence  or  dis- 
ability, such  other  person  as  shall  have  been  designated  by 
the  president,  and  notice  thereof  given  to  the  city,  and  if  no 
such  designation  has  been  made,  then  the  highest  executive 
officer  of  the  company,  in  the  order  named  in  the  company’s 
by-laws,  a copy  of  which  shall  be  furnished  to  the  city,  with 
all  amendments  from  time  to  time  made,  in  the  city  at  the 
time  shall  represent  the  company  in  all  matters  relating  to 
the  supervision  or  performance  of  the  duties  hereby  en- 
trusted to  the  commissioner. 

The  company  shall  furnish  to  the  city  street  railroad 
commissioner  suitable  room  in  connection  with  the  general 
offices  of  the  company,  and  office  furniture,  stationery  and 
supplies.  The  city  street  railroad  commissioner  shall  re- 
ceive salary  at  a rate  to  be  fixed  from  time  to  time  by  the 
council,  but  not  exceeding  $1,000  per  month,  payable  by  the 
company,  and  charged  to  operating  expenses,  and  shall  have 
the  right  to  employ  such  assistants,  accountants,  engineers, 
clerks  and  other  employes  as  he  shall  deem  necessary  to 
enable  him  at  all  times  to  inspect  and  audit  all  receipts,  dis- 
bursements, vouchers,  prices,  payrolls,  time-cards,  papers, 

40 


books,  documents  and  property  of  the  company;  and  the 
cost  and  expense  of  all  such  persons  so  employed  by  the  city 
street  railroad  commissioner,  at  salaries  fixed  by  him,  shall 
be  paid  by  the  company  monthly,  upon  the  approval  of  the 
said  city  street  railroad  commissioner ; provided  that  the  aggre- 
gate amount  thereof  in  any  one  month  shall  not  exceed  1 
per  cent,  upon  the  sum  set  aside  in  that  month,  under  Sec- 
tion 19  hereof,  to  be  used  for  operating  expenses  by  the  com- 
pany; and  the  sum  so  expended  by  the  city  street  railroad 
commissioner  shall  be  subject  to  the  approval  of  the  council, 
and  shall  be  deemed  a part  of  such  operating  expenses ; pro- 
vided further  that  the  sums  authorized  to  be  expended  by 
the  city  street  railroad  commissioner  under  the  provisions 
of  Section  28  hereof  shall  be  in  addition  to  the  amount  in 
this  section  authorized  to  be  so  expended,  and  shall  be  sub- 
ject to  like  approval  of  the  council. 

Sec.  11.  Whenever  any  difference  shall  arise  with  re- 
gard to  any  of  the  provisions  of  this  ordinance,  or  of  the 
rights  of  the  company  or  the  city  hereunder,  between  the 
company  and  the  city,  and  the  difference  is  with  regard  to  a 
matter  which  might  lawfully  be  arbitrated,  and  is  not  herein 
excluded  from  arbitration,  then  the  company  or  the  city 
may  require  such  question  or  questions  to  be  submitted  to 
arbitration,  such  arbitration  to  be  by  a board  of  arbitration 
selected  in  the  following  manner:  The  company  or  the 

city  demanding  arbitration  shall  name  its  representative 
upon  said  board,  and  notify  the  other  party,  together  with 
notice  of  the  question  upon  which  arbitration  is  demanded. 
Within  ten  days  thereafter,  the  representative  of  the  other 
party  shall  be  named  by  such  party,  and  notice  of  such 
selection  given,  failure  to  do  which  shall  entitle  the  party 
demanding  the  arbitration  to  name  such  second  arbitrator. 
The  two  thus  selected  shall,  within  ten  days  after  the  ap- 
pointment of  the  one  last  named,  select  a third  arbitrator, 
and  if  the  two  said  parties  are  unable,  within  ten  days,  to 
agree  upon  such  third  arbitrator,  then,  upon  the  application 
of  either,  the  person  who  is  District  Judge  of  the  United 
States  for  the  northern  district,  Eastern  Division,  of  Ohio, 
or  such  district  as  shall  then  comprise  the  city  of  Cleveland, 
shall  have  the  power  to  appoint  such  third  arbitrator,  five 
days’  notice  of  the  application  to  said  District  Judge  being 
given,  by  the  party  applying,  to  the  other  party ; and  in  the 
application  for  such  appointment  the  party  applying  shall 
formulate  the  questions  to  be  determined  by  the  board  of 
arbitration.  Before  making  a final  appointment  pursuant 
to  any  such  application,  the  person  making  such  appoint- 
ment shall  give  three  days’  notice  to  the  company  and  the 
city  of  the  person  or  persons  considered  by  him,  and  either 
the  city  or  the  company  may,  within  said  three  days,  present 
objection  to  any  person  or  persons  under  consideration. 

41 


When  such  third  arbitrator  shall  have  been  appointed,  a 
majority  shall  have  power  to  decide  the  questions  submitted 
to  it.  Whenever  the  appointment  of  a board  of  arbitration 
has  been  made  as  hereinbefore  provided,  and  questions  sub- 
mitted for  decision,  they  shall  be  decided  within  thirty  days 
from  the  date  of  the  appointment  of  the  third  arbitrator, 
unless  the  board  of  arbitration  unanimously  agree  to  an 
extension  of  time;  and  should  said  questions  not  be  deter- 
mined within  said  thirty  days,  and  no  such  extension  of  time 
made,  then  either  party  may  apply  to  the  person  who  is 
Judge  of  the  District  Court  aforesaid  for  the  removal  of  said 
third  arbitrator,  and  the  appointment  of  a third  arbitrator 
in  place  of  the  one  removed,  and  such  third  arbitrator  shall 
be  appointed  as  is  herein  provided  for  the  original  appoint- 
ment of  said  third  arbitrator. 

In  the  event  of  the  disqualification  or  refusal  to  act  of 
the  person  who  is  Judge  of  the  District  Court  of  the  United 
States,  as  hereinbefore  provided,  any  person  who  is  Judge 
of  the  Circuit  Court  of  the  United  States  of  the  circuit  in 
which  the  city  of  Cleveland  shall  then  be  situated  shall,  on 
request  as  hereinbefore  provided,  have  power  to  appoint,  or 
to  remove  and  appoint,  such  third  arbitrator,  as  is  hereinbe- 
fore provided. 

All  expenses  of  every  kind  incurred  by  any  board  of 
arbitration  appointed  hereunder,  including  the  fees  of  the 
arbitrators,  shall  be  fixed  by  the  board  of  arbitration  as  a 
part  of  their  award,  and  shall  be  paid  by  the  company,  and 
charged  to  operating  expenses;  provided  that  any  such  ex- 
pense in  any  period  of  six  months  above  the  sum  of  $5000 
shall  be  paid  as  an  expense,  and  paid  out  of  the  interest 
fund. 

Wherever  herein  “the  board  of  arbitration”  is  referred 
to,  or  “the  board,”  it  shall  be  taken  to  include  and  mean  any 
board  of  arbitration  constituted  as  hereinbefore  provided; 
and  wherever  “the  city  street  railroad  commissioner,”  or 
“the  commissioner,”  is  referred  to,  it  shall  be  taken  to  mean 
and  include  the  city  street  railroad  commissioner  as  pro- 
vided in  Section  10  hereof. 

Wherever,  either  in  this  section  or  elsewhere  in  this 
ordinance,  notice  is  provided  to  be  given  to  the  company,  a 
notice  in  writing,  addressed  to  the  president  of  the  com- 
pany, and  delivered  at  the  offices  of  the  company,  shall  be 
delivery  of  such  notice;  and  wherever  notice  is  provided  to 
be  given  to  the  city,  such  notice  in  writing,  addressed  to  the 
city  street  railroad  commissioner,  and  delivered  at  the  office 
provided  for  him  in  Section  10  hereof,  shall  be  delivery  to 
the  city. 

Sec.  12.  The  board  of  arbitration  herein  created  shall 
have  power  to'  determine  all  questions,  of  every  kind,  char- 
acter and  description,  arising 'between  the  city  and  the  rail- 

42 


way  company,  subject  to  the  limitation  contained  in  Section 
11  hereof,  in  the  carrying  out  of  the  provisions  of  this  ordi- 
nance, whether  expressly  committed  to  determination  by 
arbitration  by  the  provision  of  this  ordinance  or  not,  when 
submitted  to  such  arbitration  in  the  manner  provided  in 
Section  11  hereof;  and  the  determination  in  writing  of  said 
board  of  any  question  submitted  to  them  as  aforesaid  shall 
be  final  and  binding,  except  that  the  right  or  power  of  said 
board  to  determine  any  question  as  to  control  of  the  service 
and  the  fixing  of  schedules  and  routes  shall  be  subject  to 
the  limitations  prescribed  by  Section  9 hereof. 

The  city  street  railroad  commissioner  may,  pending  the 
determination  of  any  such  question  by  the  council,  and  to 
meet  emergencies,  temporarily  approve  changes  in  sched- 
ules or  routes ; but  such  schedules  or  routes  so  changed  shall 
continue  in  force  only  until  the  council  shall  have  otherwise 
directed. 

Sec.  13.  Whenever  any  board  of  arbitration  herein 
provided  for  shall  have  considered  and  determined  any  ques- 
tion, its  determination  shall  be  made  in  writing,  and  copies 
thereof  shall  forthwith  be  filed  with  the  company  and  the 
city,  as  provided  for  the  delivery  of  notices  in  Section  11 
hereof ; and  after  such  delivery  the  finding  of  the  board  shall 
be  binding  and  operative.  The  board  shall,  however,  have 
the  right,  in  any  finding  made  by  it,  to  fix  the  time  within 
which  the  things  by  it  required  shall  be  done. 

Sec.  14.  In  case  of  any  failure  on  the  part  of  the  com- 
pany to  do  and  perform  fully  and  in  good  faith  any  direc- 
tion or  award  made  by  the  board  of  arbitration  as  herein- 
before provided,  the  rate  per  cent,  of  interest  payments  pro- 
vided in  Section  16  hereof  upon  the  capital  value,  other  than 
bonds  and  floating  debt,  shall  be  reduced  from  the  rate  then 
in  force  by  such  amount  as  the  arbitrators  may  determine, 
but  not  lower  than  one  per  cent,  below  the  rate  then  in  force, 
and  shall  continue  at  such  reduced  rate  until,  in  the  opinion 
of  the  board  of  arbitration,  the  said  order  and  direction  has 
been  carried  out  by  the  company ; and  the  board  of  arbitra- 
tion shall  have  power  to  determine,  in  every  instance, 
whether  or  not  its  orders  have  ben  carried  out,  and  whether 
or  not  the  reduction  in  the  return  upon  the  capital  value 
above  stipulated  shall  be  made. 

Sec.  15.  At  all  times  during  the  continuance  of  the 
rights  herein  granted,  and  any  renewal  hereof,  the  com- 
pany shall  keep  in  its  office,  open  to  inspection  at  all  rea- 
sonable times,  full,  true  and  accurate  accounts  of  all  moneys 
expended  and  liabilities  incurred  in  connection  with  said 
business,  and  the  maintenance  and  operation  of  said  proper- 
ty, and  also  complete  statistical  accounts  of  its  business  and 
operations,  which  accounts  shall  be  kept  in  the  manner  pre- 
scribed by  the  American  Street  and  Interurban  Railway 

43 


Accountants’  Association,  or  as  may  be  provided  by  law,  or 
by  any  authority  created  by  law,  and  the  said  company  shall 
make  and  furnish  to  the  city  street  railroad  commissioner 
monthly  reports  of  its  car-mileage  and  earnings,  and  such 
other  statements  and  reports  as  the  said  commissioner  may 
from  time  to  time  direct ; and  said  commissioner  shall  at  all 
times  have  access  to,  and  full  authority  to  inspect,  examine, 
audit  and  verify,  all  accounts,  vouchers,  documents,  books 
and  property  of  the  company  relating  to  the  receipt  and  ex- 
penditure of  money,  and  the  business  done  by  the  company 
in  the  operation  of  its  railway. 

Sec.  16.  For  the  purpose  of  fixing,  from  time  to  time, 
the  rate  of  fare  to  be  charged  by  the  company,  and  the  re- 
turn to  the  company,  for  the  services  rendered  by  it  to  the 
public,  and  for  the  further  purpose  of  fixing  the  price  at 
which  the  property  of  the  company  may  be  purchased  as 
hereinafter  provided,  the  capital  value  of  all  of  the  property 
of  said  company  shall  consist  of  the  following  items : 

(a)  The  bonded  indebtedness  of  the  company,  the 
principal  thereof  aggregating  $8,128,000,  and  any  renewal 
of  any  part  or  the  whole  thereof,  and  any  addition  thereto 
made  pursuant  to  the  provision  of  this  ordinance. 

(b)  The  floating  indebtedness  of  the  company,  aggre- 
gating $1,288,000,  represented  by  bills  payable,  as  of  Janu- 
ary 1,  1908,  less  whatever  part  thereof  has  been  paid  at  the 
time  of  the  taking  effect  hereof;  also  whatever  sum,  if  any, 
is  needed  to  be  added  to  money  on  hand  to  place  the  sum 
of  $500,000  in  the  interest  fund,  as  provided  in  Section  19; 
also,  to  the  extent  that  there  is  no  money  on  hand  after 
deducting  from  the  cash  on  hand  said  sum  of  $500,000,  all 
existing  debts  of  The  Municipal  Traction  Company,  The 
Forest  City  Railway  Company,  The  Low  Fare  Railway 
Company,  The  Neutral  Street  Railway  Company,  including 
claims  hereafter  liquidated;  also  including  a sum  equal  to 
7/4  per  cent,  upon  the  par  value  of  all  stock  guaranteed  by 
The  Municipal  Traction  Company,  and  such  further  sum, 
not  exceeding  fifty  thousand  dollars  ($50,000),  as  shall  be 
determined  should  equitably  be  paid  to  persons  who  have 
disposed  of  stock  held  under  such  guarantee ; also  an  amount 
equal  to  the  par  value  of  the  issued  and  outstanding  capital 
stock  of  The  Neutral  Street  Railway  Company;  also  all 
existing  debts  of  The  Cleveland  Railway  Company,  and  ex- 
isting claims  against  said  company  hereafter  liquidated,  and 
one  arid  one-half  (lj4)  per  cent,  on  $14,675,600,  less  the 
amount  paid  by  The  Municipal  Traction  Company  to  stock- 
holders of  The  Cleveland  Railway  Company,  on  or  about 
October  1,  1908,  as  for  dividend,  and  interest  at  the  rate  of 
six  (6)  per  cent,  per  annum,  from  January  1,  1910,  to  the 
taking  effect  of  this  ordinance,  upon  the  residue  of  the  cap- 
ital value  of  The  Cleveland  Railway  Company,  as  deter- 

44 


mined  by  the  provisions  of  paragraph  (c)  of  this  section,  to 
be  divided  among  the  stockholders  of  The  Cleveland  Rail- 
way Company;  also  all  claims  against  the  receivers  which 
the  company  may  be  required  by  order  of  court  to  pay ; all 
of  which  shall  be  assumed,  by  the  acceptance  of  this  ordi- 
nance, by  the  company  upon  the  taking  effect  of  this  ordi- 
nance. 

(c)  The  residue  of  the  capital  value  of  the  company, 
to-wit,  the  sum  of  $14,675,600  (the  value  of  the  property  is 
agreed  to  be  $21,127,149.53,  to  which  must  be  added,  as  the 
value  of  The  Forest  City  property,  $1,805,600;  and  there  is 
added  the  sum  of  $1,158,300,  interest  accrued,  but  used  to 
equalize  stock  value  and  not  to  be  paid,  said  interest  being 
the  equivalent  of  9 per  cent  upon  $12,870,000  for  the  period 
ending  January  1,  1910.  The  total  of  these  sums  is  $24,091,- 
049.53.  From  this  aggregate  is  deducted  bonded  indebted- 
ness of  $8,128,000  and  floating  indebteness  as  of  January  1, 
1908,  $1,288,000.  The  total  of  these  sums  is  $9,416,000,  leav- 
ing $14,675,049.53 ; agreed  addition  to  equalize  stock  value, 
$550.47,  making  for  residue  of  capital  value,  $14,675,600), 
with  such  additions  thereto  as  may  from  time  to  time  be 
made  pursuant  to  the  provisions  of  this  ordinance. 

The  company  may,  at  any  time,  refund  its  bonds,  or 
capitalize  or  issue  mortgage  bonds  for  its  floating  debt  as 
defined  in  paragraph  (b).  All  bonds  hereafter  sold  by  the 
company  shall  be  sold  at  the  best  price  obtainable  therefor, 
and  shall  contain  a provision  making  them  payable  on  nine- 
ty days’  call,  at  any  interest  maturing  period,  at  one  hun- 
dred and  five  and  accrued  interest;  and  the  city  shall  have 
thirty  days’  notice  in  advance  of  all  such  proposed  sales  of 
bonds  by  the  company. 

There  shall  be  paid  out  of  the  interest  fund,  as  herein- 
after provided,  all  taxes  and  other  payments  herein  provided 
to  be  made  therefrom,  and  also,  as  return  upon  the  capital 
value  above  described,  five  (5)  per  cent,  per  annum  upon 
the  total  bonded  indebtedness  of  the  company,  payable  as 
provided  by  the  mortgages  securing  the  bonds;  and,  upon 
the  refunding  of  any  such  bonded  indebtedness,  there  shall 
be  paid  out  of  the  interest  fund  that  rate  per  cent,  upon  such 
refunded  bonded  indebtedness  which  the  refunding  bonds  may 
bear,  and  such  rate  as  may  be  necessary  to  amortize  the  dis- 
count, if  such  bonds  are  sold  at  a discount,  the  total,  how- 
ever, of  such  rate  of  interest  and  addition  thereto  for  amor- 
tization to  be  not  in  excess  of  six  (6)  per  cent,  per  annum 
on  par. 

There  shall  be  paid  out  of  the  interest  fund,  as  here- 
inafter provided,  from  time  to  time,  interest  at  the  rate  of 
six  (6)  per  cent,  per  annum  upon  the  aggregate  amount  of 
the  debt  of  the  company  as  fixed  in  clause  (b)  of  this  section. 

The  company  may  issue  and  sell  its  capital  stock  or 

45 


mortgage  bonds,  said  stock  being  sold  for  not  less  than  par, 
and  said  bonds  on  a basis  which  will  not  be  in  excess  of  six 
(6)  per  cent,  on  par  and  will  include  in  such  rate  provision 
for  amortizing  the  discount,  if  such  bonds  are  sold  at  a dis- 
count, or  increase  its  floating  indebtedness,  in  such  amounts 
as  shall  be  necessary  to  capitalize  the  debt  enumerated  in 
said  paragraph  (b),  or  to  provide  for  such  extensions,  better- 
ments or  permanent  improvements  as  it  is  by  this  ordinance 
provided  may  be  added  to  the  capital  value  upon  which  in- 
terest is  to  be  paid ; and  the  par  value  of  the  stocks  or  bonds 
sold  or  debt  created  for  such  purpose  shall  become  part  of 
the  capital  value ; and  if  bonds  are  sold  at  a premium,  such 
premium  shall  be  used  for  extensions,  betterments  or  perma- 
nent improvements,  or  for  paying  any  then  existing  indebt- 
edness of  the  company. 

After  meeting  the  payments  heretofore  provided  for  by 
this  section,  there  shall  be  paid,  from  the  remainder  of  said 
interest  fund,,  to  the  stockholders,  from  the  taking  effect  of 
this  ordinance,  quarterly,  a sum  equal  to  six  (6)  per  cent, 
per  annum,  payable  quarterly,  upon  the  residue  of  capital 
value  and  additions  thereto,  as  provided  by  paragraph  (c) 
hereof. 

The  company  may,  without  the  consent  of  the  city,  issue 
and  sell  its  capital  stock,  or  increase  its  bonded  or  floating 
debt;  but  no  increase  in  capital  stock  or  bonded  or  floating 
indebtedness  by  the  company  shall  be  considered  a part  of 
the  capital  value  for  the  purposes  of  this  section  unless  made 
pursuant  to  the  provisions  of  this  ordinance,  or  with  the 
consent  of  the  city. 

Sec.  17.  All  debts  of  The  Municipal  Traction  Com- 
pany, The  Forest  City  Railway  Company,  The  Low  Fare 
Railway  Company,  The  Neutral  Street  Railway  Company, 
and  The  Cleveland  Railway  Company,  including  claims 
hereafter  liquidated,  and  including  all  payments  to  be  made 
as  determined  by  Section  16  hereof,  less  all  proper  credits 
assumed  by  the  company  as  hereinbefore  provided,  to  the 
extent  that  the  same  can  be  paid  out  of  the  money  on  hand 
at  the  time  of  the  taking  effect  of  this  ordinance,  after  de- 
ducting therefrom  the  sum  of  $500,000  to  be  credited  to  the 
interest  fund  as  hereinafter  provided,  shall  be  so  paid. 

Sec.  18.  To  the  capital  value  of  the  company,  and  as 
a part  of  the  capital  value  of  said  property,  as  that  term  is 
defined  by  the  provisions  of  Section  16  hereof,  there  shall 
be  added  from  time  to  time  the  par  value  of  bonds  or  stock 
sold  or  debt  created  for  extensions,  betterments  and  perma- 
nent improvements,  as  hereinafter  provided.  All  earnings 
of  the  company,  from  every  source,  above  the  operating 
expenses  and  maintenance,  depreciation  and  renewal  allow- 
ance, shall  go  into  the  interest  fund,  as  that  fund  is  defined 
by  Section  16.  Out  of  that  fund  shall  be  paid  the  sums  pro- 

46 


vided  to  be  so  paid  by  Section  16.  Any  surplus  remaining 
in  said  interest  fund  after  the  payment  of  taxes  and  other 
charges  provided  by  this  ordinance  to  be  paid  therefrom, 
over  and  above  the  sum  of  $500,000,  shall  constitute  a fund 
to  be  absorbed  in  the  reduction  of  fares ; and  any  deficiency 
in  the  interest  fund  below  $500,000,  in  any  period  of  oper- 
ation, shall  be  first  made  good  as  is  hereinafter  provided ; it 
being  the  intent  hereof  that  the  said  interest  fund  shall  be 
maintained  at  $500,000,  and  that  all  the  payments  provided 
to  be  made  by  Section  16  shall  be  cumulative,  and  shall  be 
first  paid  out  of  the  interest  fund,  without  any  deductions 
whatever ; and  for  that  purpose,  and  out  of  the  interest  fund, 
the  company  shall  pay  all  sums  assessed  against  the  com- 
pany, its  property  or  stock,  or  against  any  income  or  inter- 
est of  the  stockholders  by  reason  of  their  ownership  of  stock, 
by  the  United  States,  the  same  being  by  law  payable  by  the 
company,  or  by  the  state  of  Ohio,  or  by  any  county,  munici- 
pal or  township  authorities  in  that  state. 

The  proceeds  of  the  sale  of  any  property  of  the  com- 
pany represented  in  the  aggregate  capital  value  of  the  com- 
pany, as  that  term  is  defined  in  Section  16  hereof,  may  be 
used  by  the  company  in  the  payment  of  floating  indebted- 
ness, or  may,  in  the  company’^  discretion,  or  if  required  by 
the  provisions  of  any  mortgage  made  by  the  company  to 
secure  any  bonded  indebtedness  forming  a part  of  said 
capital  value,  be  deposited  with  the  trustee  of  such  mort- 
gage. All  such  sums  at  any  time  on  deposit  with  such  trus- 
tee shall  be  first  taken  down  and  used  by  the  company  in 
the  construction  or  acquisition  of  any  extension,  betterment 
or  permanent  improvement  thereafter  made.  All  such  prop- 
erty shall  be  sold  at  the  best  obtainable  price,  and  the 
amount  of  the  proceeds  and  the  items  of  property  sold  shall 
be  forthwith  reported  to  the  council.  To  the  extent  that 
any  part  of  the  proceeds  of  such  sales  is  otherwise  used 
by  the  company  than  in  the  making  of  extensions,  better- 
ments and  permanent  improvements,  or  depositing  with 
such  trustee  as  above  set  forth,  the  capital  value  of  the 
company,  as  described  in  Section  16  hereof,  shall  be  reduced. 

Sec.  19.  Upon  the  taking  effect  of  this  ordinance,  the 
company  shall,  out  of  money  on  hand,  or  as  provided  in  Sec- 
tion 16  hereof,  place  the  sum  of  $500,000,  less  prepaid  ac- 
counts and  plus  accrued  accounts,  in  the  interest  fund,  which 
fund  shall  be  deposited  separately  from  the  current  receipts 
of  the  company,  and  shall  from  time  to  time  have  credited 
to  it  interest  earned  thereon  by  being  deposited  in  such 
banks  as  the  company  shall  select,  or  which  may  be  invested 
in  such  securities  as  may  be  agreed  upon  between  the  com- 
pany and  the  city.  All  other  moneys  on  hand  shall  be  used 
in  the  payment  of  debts  included  in  Section  16  hereof.  To 
the  interest  fund  thus  created  there  shall  be  added  monthly 

47 


the  sum  remaining  after  deducting  from  the  gross  receipts 
for  the  month  eleven  and  one-half  cents  per  car-mile  for 
each  revenue  mile,  exclusive  of  car-house  and  car-yard 
miles,  made  by  a car  equipped  with  motors  operated  during 
the  month,  exclusive  of  cars  operated  to  carry  materials 
used  in  the  construction  and  repair  work  of  the  company 
itself,  and  also  sixty  (60)  per  cent,  of  eleven  and  one-half 
cents  per  car-mile  for  each  revenue  mile,  exclusive  of  car- 
house  and  car-yard  miles,  made  by  a revenue  trailer  oper- 
ated during  the  month,  and  the  sums  provided  in  Section  20 
to  be  deducted  from  gross  receipts  for  the  maintenance,  re- 
newal and  depreciation  account;  and  the  fund  thus  created 
shall  be  and  constitute  the  interest  fund,  out  of  which  all 
taxes,  interest  and  dividend  and  other  payments  herein- 
before and  hereinafter  provided  for  shall  be  made.  When- 
ever the  city  establishes  for  any  line  a schedule  which  re- 
quires the  operation  of  more  cars  during  any  hour  in  the 
day  than  twice  the  number  of  cars  operated  per  hour  on  the 
base  table  for  such  line,  the  company  shall  be  allowed  by  the 
city  such  additional  car-mile  allowance  for  cars  so  oper- 
ated as  shall  be  necessary  to  pay  the  increased  cost  of  such 
operation  in  excess  of  twice  the  base  table,  if  there  shall  be 
any  such  increased  cost;  and  in  the  event  of  disagreement 
thereon,  the  amount,  if  any,  to  be  allowed  shall  be  deter- 
mined by  arbitration,  in  the  manner  hereinbefore  provided. 

Sec.  20.  The  sum  provided  in  Section  19  hereof  to  be 
deducted  from  the  gross  receipts  of  the  company  per  car- 
mile  of  operation  shall  be  used  by  the  company  for  operat- 
ing expense,  insurance,  payment  of  claims,  and  all  other 
expenditures,  exclusive  of  the  payments  required  by  Section 
16  hereof  to  be  made  upon  the  capital  value  of  the  company, 
and  taxes  and  interest  on  floating  debt,  and  payments  herein 
provided  to  be  made  out  of  the  interest  fund;  and  no  part 
thereof  in  excess  of  $1,000  per  month  shall  in  any  event  be 
expended  for  any  extension,  betterment  or  permanent  im- 
provement ; and  all  sums  so  expended  within  the  limitation 
hereinbefore  stated  for  such  extensions,  betterments  or  per- 
manent improvements  shall  be  reported  monthly  to  and 
approved  by  the  council,  and  the  interest  fund  shall  annually 
be  reimbursed  for  the  full  amount  so  expended  by  new  cap- 
ital; and  all  sums  so  expended  and  not  approved  by  the 
council  as  for  extensions,  betterments  or  permanent  im- 
provements, shall  be  charged  to  operating  expenses.  In 
addition  to  the  car-mile  operating-expense  allowance  pro- 
vided in  Section  19  hereof,  there  shall,  in  the  following 
months,  be  deducted  from  the  gross  receipts  the  following 
sums,  to-wit: 

In  January,  February,  March,  April,  May  and  Decem- 
ber, four  cents  per  car-mile;  November,  five  cents  per  car- 
mile;  and  in  June,  July,  August,  September  and  October, 

48 


six  cents  per  car-mile,  the  deductions  being  made  as  pro- 
vided in  Section  19  hereof  for  revenue  miles,  exclusive  of 
car-house  and  car-yard  miles,  made  by  cars  equipped  with 
motors,  and  60  per  cent,  of  said  rates  for  similar  miles  made 
by  trailers  operated  during  said  months. 

The  sum  so  deducted  each  month  shall  be  placed  to  the 
credit  of  the  maintenance,  depreciation  and  renewal  account, 
and  shall  not  thereafter  be  expended  for  any  other  purpose 
whatever.  The  sum  so  set  aside  shall,  if  not  needed  for  im- 
mediate maintenance  or  renewals,  be  accumulated,  and  may 
from  time  to  time  be  invested  in  the  bonds  of  the  company, 
or  in  the  payment  of  its  floating  indebtedness,  to  the  extent 
that  the  same  form  part  of  the  capital  value  of  the  company, 
as  that  term  is  defined  in  Section  16  hereof;  and,  to  facili- 
tate the  investment  of  said  fund  in  such  bonds,  the  company 
shall,  in  any  bonds  hereafter  issued  by  it,  stipulate  the  call 
price  and  conditions  provided  in  Section  16  hereof;  but  if 
the  amount  so  invested  or  paid  is  at  any  time  needed  for 
maintenance  and  renewals,  the  company  may,  for  that  pur- 
pose, issue  new  mortgage  bonds,  or  incur  new  floating  in- 
debtedness, to  the  amount  of  such  investment  or  payment, 
with  the  interest  that  would  have  accrued  thereon,  which 
new  bonds  or  floating  indebtedness  shall  become  part  of 
the  capital  value  of  the  company,  as  that  term  is  defined  in 
Section  16  hereof. 

Sec.  21.  The  amounts  per  car-mile  allowed  in  Section 
19  hereof  may  be  increased  or  decreased  from  time  to  time 
by  agreement  between  the  city  and  the  company,  so  as  to 
enable  the  company  to  meet  the  legitimate  expenses  of 
operation,  insurance,  accident  and  damage  claims,  and  to 
prevent  or  make  good  any  deficit  on  account  of  such  operat- 
ing expenses ; and  also  the  amount  required  by  Section  20 
hereof  to  be  set  aside  for  maintenance,  renewals  and  repairs 
may  be  similarly  increased  or  decreased  by  agreement;  and 
in  the  event  of  disagreement  any  such  increase  or  decrease 
in  either  car-mile  allowance  shall  be  submitted  to  arbitra- 
tion. Any  surplus  in  the  hands  of  the  company  at  the  expi- 
ration of  any  period  of  one  year  remaining  unexpended  for 
operating  expenses,  as  hereinbefore  provided,  out  of  the  car- 
mile  allowance  provided  by  Section  19  hereof,  exclusive  of 
the  amount  required  to  be  credited  to  the  maintenance  and 
renewal  account  by  Section  20  hereof,  shall  be  placed  to  the 
credit  of  the  interest  fund  hereinbefore  described. 

The  intent  hereof  with  regard  to  the  sum  authorized  by 
Section  20  hereof  to  be  set  aside  for  maintenance,  deprecia- 
tion and  renewal  is  to  enable  the  company  to  maintain,  re- 
new, replace,  preserve  and  keep  its  railway  system  and 
property,  and  every  part  thereof,  and  all  extensions,  better- 
ments and  permanent  improvements  hereafter  made  pursu- 
ant hereto,  in  good  condition,  thorough  repair  and  working 

49 


order,  the  standard  of  such  condition,  repair  and  working- 
order  being  an  average  for  the  entire  system  of  70  per  cent, 
of  its  reproduction  value;  and  the  car-mile  allowance  pro- 
vided by  Section  20  hereof  for  the  purpose  of  maintenance 
and  renewal  shall  not  at  any  time  be  diminished,  unless 
the  value  of  the  property  of  the  company  and  the  amount 
accumulated  in  the  maintenance  and  renewal  fund,  and  in- 
vested as  is  provided  in  Section  20  hereof,  aggregate  more 
than  70  per  cent,  of  the  reproduction  value  of  the  said  entire 
system.  No  renewal  or  replacement  charged  to  the  main- 
tenance, depreciation  and  renewal  account  shall  be  made 
by  the  company  until  it  has  been  approved  by  the  city 
council,  or  by  the  city  street  railroad  commissioner  when 
thereunto  duly  authorized  by  the  council  to  act. 

Sec.  22.  The  maximum  rate  of  fare  for  a single  con- 
tinuous ride  within  the  present  limits  of  the  city  of  Cleve- 
land, in  one  direction,  over  any  route  of  said  company,  shall 
be  four  cent$  (4c)  cash  fare,  seven  tickets  for  twenty-five 
cents  (25c),  one  cent  (lc)  transfer,  no  rebate;  and,  including 
said  maximum  rate,  the  following  schedule  or  scale  of  fares 
is  hereby  established. 

(a)  Four  cents  cash  fare,  seven  tickets  for  twenty-five 
cents  (25c),  one  cent  (lc)  transfer,  no  rebate. 

(b)  Four  cents  (4c)  cash  fare,  seven  (7)  tickets  for 
twenty-five  cents  (25c),  one  cent  (lc)  transfer,  one  cent 
(lc)  rebate. 

(c)  Four  cents  (4c)  cash  fare,  three  (3)  tickets  for 
ten  cents  (10c),  one  cent  (lc)  transfer,  no  rebate. 

(d)  Four  cents  (4c)  cash  fare,  three  (3)  tickets  for 
ten  cents  (10c),  one  cent  (lc)  transfer,  one  cent  (lc)  rebate. 

(e)  Three  cents  (3c)  cash  fare,  one  cent  (lc)  transfer, 
no  rebate. 

(f)  Three  cents  (3c)  cash  fare,  one  cent  (lc)  transfer, 
one  cent  (lc)  rebate. 

(g)  Three  cents  (3c)  cash  fare,  two  (2)  tickets  for 
five  cents  (5c),  one  cent  (lc)  transfer,  no  rebate. 

(h)  Three  cents  (3c)  cash  fare,  two  (2)  tickets  for 
five  cents  (5c),  one  cent  (lc)  transfer,  one  cent  (lc)  rebate. 

(i)  Two  cents  (2c)  cash  fare,  one  cent  (lc)  transfer, 
no  rebate. 

(j)  Two  cents  (2c)  cash  fare,  one  cent  (lc)  transfer, 
one  cent  (lc)  rebate. 

Each  of  the  foregoing  rates  of  fare,  when  in  force,  shall 
be  the  rate  of  fare  for  a single  continuous  ride  within  the 
present  limits  of  the  city  of  Cleveland  in  one  direction,  over 
any  route  of  said  company,  whether  enumerated  in  Section 
2 hereof  or  not ; and  when  any  of  the  foregoing  rates  of  fare 
is  in  force  with  regard  to  which  a ticket  rate  is  provided,  the 
company  shall  sell,  on  all  of  its  cars,  at  all  times,  reissuable 
tickets  at  the  rate  provided,  each  of  which  tickets  shall  en- 

50 


title  the  holder  to  one  such  ride.  At  all  times,  any  passen- 
ger demanding  a transfer-ticket  at  the  time  of  paying  such 
cash  or  ticket  rate  of  fare  as  shall  then  be  in  force,  shall  be 
entitled,  under  the  provisions  of  the  rate  of  fare  then  in 
force  as  to  transfers,  to  transfer  from  the  route  on  which  he 
shall  have  paid  such  fare  to  any  other  route  of  said  company, 
except  in  a substantially  opposite  direction  on  a route  paral- 
lel or  substantially  parallel  thereto,  and  to  ride  continuous- 
ly to  any  point  upon  such  second  route  within  the  limits  of 
the  city  of  Cleveland,  provided  he  transfer  to  a car  upon 
such  second  route  within  five  minutes  after  leaving  the  car 
upon  which  he  shall  have  paid  fare,  or  to  the  first  car  of  such 
company  passing  such  transfer  point  upon  such  second 
route,  and  at  the  first  point  of  intersection  of  said  route 
reached  by  the  car  upon  which  he  shall  have  paid  fare.  If 
cars  upon  two  or  more  routes  are  operated  regularly  along 
the  same  street,  passengers  who  are  able  to  reach  their  des- 
tination by  one  of  said  routes,  without  transfer  to  another 
of  said  routes,  shall  board  a car  upon  the  route  reaching 
such  destination,  and  shall  not  be  entitled  to  transfer  there- 
to from  any  other  route. 

Any  passenger  transferring  to  a car  upon  the  East 
55th  street  cross-town  line  of  said  company,  or  upon  its 
cross-town  line  in  East  105th  street,  Woodhill  road  and  East 
93rd  street,  or  upon  its  cross-town  line  in  West  65th  street, 
shall,  upon  demand,  at  the  time  of  presenting,  within  the 
time  herein  provided,  a transfer-ticket  to  such  cross-town 
line  from  any  intersecting  line  of  said  company,  be  entitled, 
without  additional  charge,  to  transfer  to  any  other  route  of 
said  company  intersecting  such  cross-town  line,  and  to  ride 
to  any  point  upon  such  intersecting  route,  provided  he 
transfers  to  a car  upon  such  last  mentioned  route  within 
five  minutes  after  leaving  such  cross-town  car,  or  to  the 
first  regular  car  upon  such  last-mentioned  route. 

The  company  shall  not  be  required,  however,  to  furnish 
a round  trip  for  a single  fare,  nor  to  carry  any  passenger  to 
any  point  upon  its  railway  and  from  such  point  to  the  vicin- 
ity of  his  starting-point  for  a single  fare ; and  the  company 
may,  subject  to  the  approval  of  the  city  council,  as  herein- 
before provided,  make  such  reasonable  regulations,  not  in- 
consistent with  the  provisions  of  this  ordinance,  as  may  be 
necessary  to  prevent  misuse  of  transfers. 

Any  child  under  six  years  of  age,  accompanied  by  a 
person  paying  fare,  shall  be  carried  free.  Two  persons  un- 
der six  years  of  age,  when  accompanied  by  a passenger  pay- 
ing fare,  shall  be  carried  for  a single  fare. 

The  company  may  make  and  enforce  proper  and  rea- 
sonable rules  and  regulations  relating  to  the  collection  of 
fares  and  the  issuance  and  acceptance  of  transfers  upon  the 

51 


several  routes  of  the  company,  subject,  however,  to  the  ap- 
proval of  the  city  council. 

Sec.  23.  At  once  upon  the  taking  effect  of  this  ordi- 
nance, the  company  shall  put  into  operation  the  rate  of  fare 
stipulated  in  paragraph  (e)  of  Section  22  hereof,  to-wit, 
three  cents  cash  fare  and  one  cent  charge  for  a transfer, 
and  said  rate  of  fare  shall  continue  in  force  for  eight  months 
from  the  taking  effect  hereof;  provided  that  the  company 
shall  have  installed  450  pay-enter  cars  within  five  months 
from  the  taking  effect  hereof,  as  is  provided  in  Section  8 
hereof ; otherwise  said  initial  rate  of  fare  shall  continue  in 
force  for  three  months  beyond  the  completion  of  the  instal- 
lation of  said  450  pay-enter  cars.  At  the  termination  of  said 
eight  months,  or  such  longer  period  as  may  be  rendered 
necessary  by  the  foregoing  provision,  if  the  amount  in  the 
interest  fund,  less  accrued  proportionate  payments  to  be 
made  therefrom,  shall  be  less  than  five  hundred  thousand 
dollars  ($500,000),  the  company  shall  install  the  next  higher 
rate  of  fare  provided  in  Section  22  hereof,  unless,  in  the 
opinion  of  the  company,  a rate  of  fare  higher  than  the  next 
higher  to  the  rate  in  force  during  the  said  initial  period 
shall  be  necessary  to  restore  the  balance  in  the  interest  fund, 
and  to  provide  for  current  disbursements  therefrom,  as  here- 
inbefore provided,  in  which  event,  with  the  consent  of  the 
city,  the  company  may  install  any  rate  of  fare  not  higher 
than  the  maximum  provided  in  Section  22  hereof ; or,  upon 
failure  of  the  city  to  agree  thereto,  the  question  may  be  sub- 
mitted to  arbitration  as  hereinbefore  provided ; and  the  rate 
of  fare  so  installed  after  the  termination  of  said  initial 
period,  whether  the  next  higher  rate  or  any  rate  not  higher 
than  the  maximum,  installed  with  the  consent  of  the  city 
or  by  award  of  the  board  of  arbitration,  shall  continue  in 
force  for  six  months.  Thereafter  the  rate  of  fare  shall  be 
changed  from  time  to  time  as  follows : 

Whenever  the  amount  credited  to  the  interest  fund,  less 
the  proportionate  accrued  payments  to  be  made  therefrom, 
shall  be  less  than  five  hundred  thousand  dollars  ($500,000) 
by  the  amount  of  two  hundred  thousand  dollars  ($200,000), 
this  shall  be  prima  facie  evidence  of  the  necessity  of  raising 
the  rate  of  fare  to  the  next  higher  rate  on  the  scale  provided 
in  Section  22  hereof. 

Whenever  the  balance  in  the  interest  fund,  less  propor- 
tionate accrued  payments  to  be  made  therefrom,  shall  be 
more  than  five  hundred  thousand  dollars  ($500,000)  by  the 
amount  of  two  hundred  thousand  dollars  ($200,000),  it 
shall  be  prima  facie  evidence  of  the  necessity  of  lowering 
the  rate  of  fare  to  the  next  lower  rate  on  the  scale  provided 
in  Section  22  hereof. 

If,  at  any  time,  either  the  city  or  the  company  shall  be 
of  opinion  that  the  fare  should  be  increased  or  decreased 

52 


otherwise  than  as  is  hereinbefore  provided,  such  party  may 
give  written  notice  to  the  other  of  its  opinion,  stating  the 
increase  or  decrease  desired.  If  this  is  assented  to,  the 
change  shall  be  made.  In  case  of  disagreement,  the  ques- 
tion of  increase  or  decrease,  and  the  rate  to  be  fixed,  shall 
at  once  be  submitted  to  arbitration,  as  is  provided  in  Section 
11  hereof,  and  the  rate  fixed  by  the  award  of  such  board  of 
arbitration,  not  exceeding  the  maximum  rate  of  fare  pro- 
vided for  by  this  ordinance,  shall  be  at  once  installed. 

Wherever,  in  this  section  or  in  this  ordinance,  it  is  pro- 
vided that  in  determining  the  amount  in  the  interest  fund 
deductions  shall  be  made  for  “accrued  proportionate  pay- 
ments to  be  made  therefrom,”  such  deductions  shall  be 
made  as  follows : 

The  total  amount  to  be  deducted  during  the  year  shall 
be  the  aggregate  amount  of  interest  and  dividend  payments 
provided  by  Section  16  hereof,  together  with  all  taxes,  and 
the  said  aggregate  shall  be  deducted  at  the  following  rates : 
for  January,  seven  per  cent.;  for  February,  six  per  cent.; 
for  March,  seven  per  cent. ; for  April,  eight  per  cent. ; for 
May,  nine  per  cent.;  for  June,  nine  per  cent.;  for  July,  ten 
per  cent. ; for  August,  ten  per  cent. ; for  September,  nine  per 
cent.;  for  October,  nine  per  cent.;  for  November,  eight  per 
cent.;  for  December,  eight  per  cent. 

Sec.  24.  The  company  may  transport  along  and  upon 
its  lines,  in  suitable  cars,  such  materials,  supplies,  appli- 
ances and  tools  as  it  may  need  for  the  construction,  main- 
tenance and  operation  of  its  road.  It  may  carry  upon  its 
passenger-cars,  or  upon  other  cars,  mail  for  the  government 
of  the  United  States.  It  may  operate  funeral-cars,  observa- 
tion-cars, express-passenger  service,  and  other  special  cars, 
at  rates  to  be  fixed  from  time  to  time  by  the  council  of  the 
city  of  Cleveland,  not  lower  than  the  rate  in  force  for  the 
carriage  of  passengers  from  time  to  time,  as  is  provided  by 
the  terms  of  this  ordinance.  The  company  shall  also  oper- 
ate hospital-  and  supply-cars  for  the  city,  and  such  other 
cars  for  exclusively  municipal  purposes  as  the  city  shall 
direct;  and  the  city  shall  furnish  and  maintain  such  cars, 
and  shall  pay  the  cost  of  operating  such  cars,  to-wit,  the 
wages  of  all  employes  of  the  company  in  charge  thereof, 
plus  the  cost  of  current,  but  exclusive  of  any  contribution 
for  fixed  charges,  or  for  track  maintenance  or  renewal.  The 
transportation  of  materials,  supplies,  appliances,  tools  and 
mail,  and  the  operation  of  special  cars,  shall  not  be  per- 
mitted to  interfere  with  or  delay  the  carriage  of  passengers, 
and  shall  at  all  times  be  subject  to  regulation  by  the  coun- 
cil. The  car-miles  operated  by  the  company  in  transporta- 
tion of  city  cars,  materials,  supplies,  appliances  and  tools 
shall  not  be  counted  in  the  car-miles  made  for  the  purposes 
of  Sections  19  and  20  hereof. 


53 


Sec.  25.  The  cars  of  the  company  shall  be  operated 
to  Garfield  Park  on  its  Broadway  line,  and  passengers  shall 
be  carried  to  and  from  said  point  at  the  same  rate  of  fare 
charged  under  the  provision  of  this  ordinance  by  the  com- 
pany upon  its  lines  within  the  limits  of  the  city  of  Cleve- 
land. By  the  acceptance  of  this  ordinance,  as  hereinafter 
provided,  the  company  agrees  to  accept  an  ordinance  au- 
thorizing it  to  extend  its  Lorain-street  line  to  the  present 
limits  of  the  city  of  Cleveland,  consents  of  property-owners 
having  been  presented  for  the  passage  of  such  an  ordinance, 
and  immediately  thereafter  to  construct  and  extend  its  Lo- 
rain-street line  to  said  city  limits,  and  to  operate  said  line  to 
the  present  limits  of  the  city  of  Cleveland  at  the  rate  of 
fare  from  time  to  time  in  force  under  the  provisions  of  this 
ordinance  within  the  limits  of  the  city  of  Cleveland;  pro- 
vided that  in  lieu  of  accepting  such  ordinance  and  building 
such  extension,  the  company  shall  have  the  right,  with  the 
consent  of  the  city,  to  make  any  reasonable  arrangement 
for  the  operation  of  its  cars  to  the  city  limits  on  Lorain 
street,  over  existing  tracks  therein. 

Sec.  26.  The  salaries  of  persons  employed  by  the  com- 
pany and  receiving  compensation  at  the  rate  of  $1,500  per 
annum  or  more  shall  not  be  in  excess  of  those  paid  for  simi- 
lar work  by  other  properties  of  the  same  relative  size. 

Sec.  27.  The  words  “extensions,  betterments  and  per- 
manent improvements,”  as  used  in  this  ordinance,  in  con- 
tradistinction from  repairs,  maintenance,  renewals  and  re- 
placements of  property,  shall  be  held  to  mean  the  acquisition, 
construction  and  equipment  of  additional  lines  of  street- 
railway,  power-houses,  switches,  sidings,  car-houses,  shops, 
rolling-stock,  machinery  and  other  property,  or  additions  to 
existing  equipment,  or  difference  between  cost  of  new 
sources  of  power,  or  new  methods  of  propulsion,  and  the 
cost  of  the  source  of  power  or  method  of  propulsion  re- 
placed, if  new  at  the  time  of  replacement,  and  all  expenses 
incident  to  such  construction  and  acquisition;  and  also, 
wherever  any  property  of  the  company  is  replaced  by  other 
property  at  a greater  cost  than  would  be  the  first  cost  of 
such  property,  if  purchased  at  the  time  of  replacement,  then 
such  excess  cost  shall  be  deemed  an  extension,  betterment 
or  permanent  improvement  within  the  meaning  of  those 
words  as  used  in  this  ordinance;  and  in  the  event  of  any 
disagreement  between  the  company  and  the  city  with  regard 
thereto,  a board  of  arbitration,  selected  as  provided  in  Sec- 
tion 11  hereof,  shall  have  the  power  to  determine,  under  the 
provisions  of  this  section,  what  proposed  expenditures  by 
the  company  are  for  extensions,  betterments  and  permanent 
improvements. 

Sec.  28.  Either  the  company  or  the  city  may  propose 
extensions,  betterments  or  permanent  improvements. 

54 


Whenever  any  extension,  betterment  or  permanent  im- 
provement is  proposed  by  the  city,  estimates  of  the  cost 
thereof  and  plans  and  specifications  thereof  shall  be  filed 
with  the  company  by  the  city,  and  whenever  any  extension, 
betterment,  or  permanent  improvement  is  proposed  by  the 
company  otherwise  than  of  the  kind  and  subject  to  the  limi- 
tations contained  in  Section  20  hereof,  estimates  of  the  cost 
thereof,  and  plans  and  specifications  therefor,  shall  be  filed 
with  the  city  by  the  company;  provided,  however,  that  the 
right  of  the  city  to  propose  extensions,  betterments  or  per- 
manent improvements  shall  terminate  whenever  the  unex- 
pired term  of  this  franchise,  or  any  renewal  hereof,  is  less 
than  fifteen  years. 

When  such  extensions,  betterments  or  permanent  im- 
provements proposed  by  the  company  have  been  approved 
by  the  council,  or  when  estimates  of  the  cost  and  plans  and 
specifications  of  any  extension,  betterment  or  permanent 
improvement  proposed  by  the  city  have  been  filed  with  the 
company  by  the  city,  such  extensions,  betterments  and  per- 
manent improvements  shall  be  made,  if  the  company,  acting 
in  good  faith,  and  using  all  usual  means,  can  procure  the 
necessary  money,  by  the  sale  of  stocks,  or  bonds,  or  by  an 
increase  of  floating  debt,  unless  the  company  shall  claim  in 
any  such  case  that  extensions,  betterments  or  permanent 
improvements  proposed  by  the  city  will  impair  the  present 
or  future  ability  of  the  company  to  earn  the  amounts  stipu- 
lated in  Section  16  hereof,  or  that  the  company  is  unable  to 
finance  said  extensions,  betterments  or  permanent  improve- 
ments, in  either  of  which  cases  the  claim  of  the  company 
shall  be  submitted  to  arbitration,  as  provided  in  Section  11 
hereof.  Provided,  however,  that  the  expenditure  of  the  two 
million,  five  hundred  thousand  dollars  ($2,500,000.00)  here- 
inafter required  shall  not  be  subject  to  such  arbitration. 
And  the  capital  value,  as  that  term  is  defined  by  Section  16 
hereof,  shall  be  increased  as  provided  in  Section  16  hereof ; 
and  the  company  shall  be  entitled  to  have  payments  made 
to  it  thereon  out  of  the  interest  fund  at  the  rate  of  six  (6) 
per  cent,  per  annum,  payable  quarterly,  if  the  expense  is 
met  by  the  issuance  of  stock,  or  at  the  rate  of  interest  borne 
by  the  bonds,  including  the  amortization  of  the  discount,  if 
bonds  are  sold  at  a discount,  or  floating  debt,  if  the  expense 
is  met  by  bond  issue  or  increased  floating  debt,  at  a rate  not 
exceeding  that  hereinbefore  provided. 

The  city  street  railroad  commissioner  shall  have  the 
right  to  employ  such  assistance  as  he  shall  deem  necessary 
for  the  purpose  of  checking  over  estimates  of  any  extension, 
betterment  or  permanent  improvement  proposed  by  the 
company  and  also  for  the  purpose  of  making  the  estimates, 
plans  and  specifications  of  any  extension,  betterment  or  per- 
manent improvement  proposed  by  the  city,  and  if  the  work 

55 


of  constructing  such  extensions,  betterments  or  permanent 
improvements  is  undertaken,  he  shall  have  the  right  to  em- 
ploy such  assistance  as  he  shall  deem  necessary  for  the  pur- 
pose of  checking  material,  labor  or  other  costs  in  the  sup- 
plying of  such  extensions,  betterments  or  permanent  im- 
provements, and  the  company  shall  pay  all  bills  for  such 
assistance  and  services  approved  by  the  city  street  railroad 
commissioner;  provided,  that  such  bills  shall  be  subject  to 
the  approval  of  the  city  council,  and  shall  not  in  the  aggre- 
gate exceed  one  per  cent,  of  the  cost  of  the  proposed  exten- 
sions, betterments  or  permanent  improvements,  which  sum, 
if  the  extension,  betterment  or  permanent  improvement  is 
made,  shall  be  included  in  the  actual  cost  thereof;  or,  if  the 
extension,  betterment  or  permanent  improvement  is  not 
made,  the  cost  thereof,  not  exceeding  one  per  cent  of  the 
estimated  cost  thereof,  shall  be  paid  by  the  company  as  an 
expense  out  of  the  interest  fund. 

Immediately  upon  this  ordinance  taking  effect,  the 
company  shall  proceed  to  expend  the  sum  of  $2,500,000  in 
such  extensions,  betterments  or  permanent  improvements 
as  may  be  designated  by  the  city. 

Sec.  29.  Nothing  shall  be  added  to  the  capital  value 
provided  in  Section  16  hereof  on  account  of  any  extension, 
betterment  or  permanent  improvement  made  by  the  com- 
pany without  the  approval  of  the  city. 

Sec.  30.  During  the  continuance  of  this  grant  the  com- 
pany may  maintain  the  existing  suburban  lines  operated  by 
it  at  the  time  of  the  passage  hereof ; but  the  cost  of  the  con- 
struction of  extensions,  betterments  and  improvements  up- 
on existing  suburban  lines,  except  to  the  extent  of  the  in- 
creased cost  of  replacing  property,  as  defined  in  Section  27 
hereof,  or  of  the  building  and  construction  of  additional 
suburban  lines,  shall  not  be  included  in  the  capital  value  of 
the  company,  as  fixed  by  Section  16  hereof,  without  the  con- 
sent of  the  city,  which  consent  shall  be  secured  in  the  man- 
ner provided  in  Section  28  hereof  for  the  making  of  exten- 
sions, betterments  or  permanent  improvements  upon  the 
property  of  the  company  within  the  city. 

The  company  shall  perform  all  existing  contracts  be- 
tween it  and  any  municipal  corporations  or  boards  of  county 
commissioners  under  which  suburban  lines  are  now  oper- 
ated, but  shall  not  increase  the  service  above  or  reduce  the 
fare  below  the  requirements  of  such  existing  contracts ; and 
in  the  event  of  any  dispute  between  the  city  and  the  com- 
pany as  to  the  requirements  of  such  existing  contracts,  the 
dispute  shall  be  submitted  to  arbitration,  if  the  consent  of 
the  municipal  corporation  or  other  public  authority  inter- 
ested can  be  obtained.  In  the  event  of  such  arbitration,  the 
city  shall  appoint  one  arbitrator,  and  the  suburban  author- 
ity one  arbitrator;  the  third  shall  be  appointed  as  provided 

56 


in  Section  11  hereof.  Otherwise,  such  dispute  shall  be  liti- 
gated, and  the  city  shall  have  the  right  to  be  represented 
by  counsel. 

The  company  may  accept  new  grants  for  the  operation 
of  suburban  lines,  or  renewals  of  existing  grants ; but  after 
the  acceptance  of  such  new  grants,  or  renewal  of  existing 
grants,  the  amount  deducted  from  the  gross  receipts  of  the 
company  for  car  miles  made  in  the  operation  of  such  new  or 
renewal  grant,  under  the  provisions  of  Sections  19  and  20 
hereof,  shall  in  no  event  exceed  the  gross  receipts  made  in 
such  operation  of  such  new  or  renewal  grant,  less  the  dis- 
tributive share  of  the  aggregate  taxes  of  the  company, 
which  should  be  paid  upon  the  property  operated  under  such 
new  or  renewal  grant;  and  the  car  mileage  allowance  for 
expense  of  operation  and  maintenance  within  the  city  pro- 
vided by  Sections  19  and  20  hereof  shall  not  be  increased  on 
account  of  any  deficiency  therein.  The  gross  receipts  of 
operation  of  any  such  new  or  renewed  suburban  grant  shall 
be  the  excess  of  the  total  receipts  of  the  line  above  the  full 
city  rate  for  all  passengers  using  any  part  of  the  line  within 
the  city  limits.  But  should  later  operation  under  such  new 
grants  or  renewal  grants  show  a surplus  of  gross  receipts  of 
the  company  for  car-miles  made  in  the  operation  of  such 
new  or  renewal  grant  over  the  deduction  from  gross  receipts 
authorized  to  be  made  under  the  provisions  of  this  ordin- 
ance, the  company  may  use  this  surplus  to  reimburse  itself 
for  any  earlier  deficiency;  and  when  this  has  been  accom- 
plished, the  subsequent  receipts  shall  be  used  as  provided 
in  this  ordinance,  and,  if  the  council  approve,  the  capital 
value  of  the  company  shall  be  increased  by  the  then  value 
of  the  property  used  in  any  such  extensions,  betterments 
or  permanent  improvements  which  have  been  so  con- 
structed. 

The  right  so  to  include  such  property  in  capital  value, 
and  the  amount  to  be  so  included,  shall  be  determined  by 
agreement  between  the  city  and  the  company,  and  shall  not 
be  subject  to  arbitration. 

Provided  that  during  any  unexpired  term  of  this  fran- 
chise of  more  than  fifteen  (15)  years’  duration,  upon  demand 
of  the  city,  the  company  shall  extend  to  all  (or  such  part 
as  the  city  may  designate)  of  its  existing  lines  in  that  por- 
tion of  the  city  of  Cleveland  formerly  known  as  Collinwood 
all,  any  or  such  parts  of  the  benefits  of  Ordinance  No. 
16238-A,  as  amended,  as  may  be  designated  by  the  city,  and 
such  terms  and  conditions  of  such  ordinance,  as  so  amended 
and  as  so  designated  by  the  city,  shall  apply  thereto;  but 
the  company  shall  not  thereby  be  deemed  to  have  surren- 
dered any  franchise  existing  in  such  territory. 

Sec.  31.  During  the  continuance  of  this  grant  the  com- 
pany shall  carry  on  its  cars,  free  of  charge,  all  policemen 

57 


and  firemen  of  the  city  of  Cleveland,  in  uniform  and  on 
duty,  but  shall  otherwise  give  no  free  passes  or  free  trans- 
portation unless  otherwise  required  by  law  except  to  motor- 
men,  conductors  and  inspectors  of  the  company  in  uniform 
or  upon  presentation  of  badge  when  going  to  or  from  work ; 
and  the  company  shall  have  the  right  to  furnish  to  its  other 
employes,  except  employes  in  the  general  office,  free  trans- 
portation while  on  duty  or  going  to  or  returning  from  work, 
the  cost  of  the  same  to  be  charged  to  operation.  The  com- 
pany shall,  by  the  adoption  of  all  reasonable  protective 
measures,  and  by  necessary  supervision  of  its  employes  and 
accounting  force,  provide  for  the  collection  of  fares  due  the 
company  from  passengers.  If,  at  any  time,  the  city  street 
railroad  commissioner  notifies  the  company  that,  in  his 
judgment,  any  laxity,  carelessness  or  inefficiency  exists  in 
the  matter  of  collecting  the  revenue  of  the  company,  or  of 
permitting  free  transportation  in  any  way,  or  any  waste- 
fulness in  the  purchase  or  use  of  material,  or  employment 
have  the  right  to  employ  such  assistance  as  he  may  need 
of  persons,  or  their  compensation,  said  commissioner  shall 
to  determine  the  facts,  and  the  company  shall  pay  the  cost 
of  all  such  assistance,  subject  to  the  limitations  imposed  by 
Section  10  hereof.  If,  as  the  result  of  such  investigation,  it 
is  found  that  any  such  failure  to  collect  revenues,  or  waste- 
fulness, exists,  it  shall  be  at  once  corrected.  If  there  be 
disagreement  between  the  city  and  the  company  as  to  the 
result  of  such  investigation,  or  as  to  the  efficiency  of  any 
corrective  applied  by  the  company,  and  the  question  having 
been  submitted  to  arbitration  under  the  provisions  of  Sec- 
tion 11  hereof,  such  board  finds  such  failure  to  exist,  or  not 
to  have  been  corrected,  the  reduction  in  the  rate  per  cent 
of  interest  payments,  as  provided  in  Section  14  hereof,  may 
be  made  and  enforced  by  the  board  of  arbitration  until  the 
failure  is  corrected. 

Sec.  32.  The  company,  by  the  acceptance  of  this  or- 
dinance, agrees  to  grant  to  the  city,  and  the  city  hereby  re- 
serves to  itself,  the  right,  at  any  time  during  the  life  of  this 
grant  or  any  renewal  thereof,  whenever  the  city  shall  have 
legal  power  so  to  do,  upon  giving  at  least  six  months’  prev- 
ious notice  in  writing  of  its  intention  so  to  do,  to  purchase 
and  take  over  the  entire  street  railway  system  of  the  com- 
pany, including  all  property  then  existing  which  now  con- 
stitutes the  street  railway  system  in  the  possession  of  and 
operated  by  The  Cleveland  Railway  Company,  with  all 
renewals,  improvements,  betterments  and  repairs  thereon 
and  additions  thereto,  and  including  all  the  property,  grants, 
franchises,  rights  and  claims  of  every  kind,  character  and 
description  then  owned  by  said  company.  In  case  the  city 
shall  purchase  and  take  over  the  street  railway  property  of 
the  company  during  the  life  of  this  grant  or  any  renewal 

58 


thereof,  as  in  this  section  provided,  then  it  shall  pay  for  the 
same  the  capital  value  of  said  property,  as  fixed  by  Section 
16  hereof,  increased  as  in  this  ordinance  provided,  and  di- 
minished by  any  reduction  thereof  out  of  surplus  earnings 
or  otherwise,  as  in  this  ordinance  provided,  plus  ten  per  cent, 
thereof,  the  city  at  the  time  of  such  purchase  assuming 
and  agreeing  to  pay,  in  addition  thereto,  all  the  obligations, 
indebtedness  and  liabilities  of  said  company,  and  all  liens 
other  than  bonded  indebtedness  upon  its  property  then  ex- 
isting, which  bonded  indebtedness  the  city  shall,  at  the  time 
of  any  such  purchase,  provide  for  by  assumption  if  the  law 
authorizing  such  purchase  permits,  or  by  payment  if  the 
law  so  authorizes  at  the  time  and  under  the  provisions  of 
the  bonds  they  are  callable,  or  by  taking  the  property  sub- 
ject thereto  if  that  be  the  mode  provided  by  law  for  dealing 
with  such  existing  bonded  indebtedness  in  making  such 
purchase.  To  the  extent  that  the  city  takes  the  property 
subject  to,  assumes  or  pays,  either  floating  or  bonded  in- 
debtedness, the  amount  thereof  shall  be  deducted  from 
capital  value  before  the  addition  of  the  ten  per  cent  here- 
inbefore provided  in  determining  the  price  to  be  paid  by 
the  city.  Should  the  city  exercise  the  option  to  purchase 
hereby  conferred,  upon  demand  of  the  city,  the  company 
shall  convert  into  cash  at  the  best  price  obtainable,  the 
assets  or  securities  then  in  the  sinking  fund  provided  for  by 
Section  40  hereof,  and  the  proceeds  shall  be  deducted  from 
the  purchase  price  to  be  paid  by  the  city ; and  in  default  of 
the  city  so  demanding  such  conversion,  such  assets  or  se- 
curities shall  become  the  property  of  the  city,  but  shall  not 
be  deducted  from  purchase  price.  Upon  giving  such  notice 
in  writing  to  the  company  by  the  city,  as  is  provided  in 
Section  32  hereof,  the  law  then  permitting  such  purchase, 
of  the  exercise  of  the  option  to  purchase  herein  given,  the 
company  shall,  and  hereby  agrees  that  it  will,  as  soon  there- 
after as  the  law  will  permit,  execute  and  deliver  to  the  city 
a good  and  sufficient  deed,  conveyance  and  assignment,  con- 
veying a good  marketable  title  to  said  railways,  grants,  prop- 
erty and  franchises  then  held,  including  cash  on  hand  and  in 
the  interest  fund,  less  enough  to  pay  dividends  at  the  rate  of 
six  per  cent,  to  date,  subject,  however,  to  all  existing  liens, 
indebtedness,  obligations  and  liabilities  of  said  company;  and 
upon  the  delivery  of  said  deed,  conveyance  and  assignment, 
the  city  shall  pay  said  purchase  price,  as  hereinbefore  provided, 
and  execute  all  papers  necessary  to  carry  into  effect  the  terms 
of  such  purchase. 

The  company  agrees  that,  to  the  extent  that  its  current 
obligations,  indebtedness  and  liabilities  then  liquidated,  ex- 
cept for  extensions,  betterments  and  permanent  improve- 
ments, made  in  accordance  with  the  terms  of  this  ordinance, 

59 


do,  at  the  time  of  any  such  purchase,  exceed  a sum  equal  to 
ten  per  cent  of  the  gross  receipts  of  the  company  from  all 
sources  for  the  next  preceding  calendar  year,  such  excess 
shall  be  deducted  from  the  capital  value  in  determining  the 
price  to  be  paid  by  the  city. 

Sec.  33.  The  company,  by  the  acceptance  of  this  ordi- 
nance, does  grant  to  the  city,  and  the  city  hereby  reserves  to 
itself,  the  right,  from  and  after  the  first  day  of  January, 
1918,  to  designate  any  firm,  person  or  corporation  having 
lawful  authority  to  acquire,  own  and  operate  street  railways 
in  the  city  of  Cleveland  (herein  called  the  licensee)  who  or 
which  shall  have  the  right  to  purchase  the  street-railway 
system,  property  and  rights  of  the  company,  in  the  same 
manner  as  the  city  hereunder  has  the  right  to  purchase  the 
same,  subject  to  the  conditions  that  the  licensee  agrees  to 
accept  a smaller  return  by  at  least  one-quarter  of  one  per 
cent,  upon  the  portion  of  capital  value  described  in  para- 
graph (c)  of  Section  16  hereof  than  the  company  is  then 
entitled  to  receive  and  shall  purchase  the  same  property 
which  the  city  has  herein  reserved  the  right  to  purchase  in 
Section  32  hereof ; that  the  price  to  be  paid  therefor  by  the 
said  licensee  shall  be  the  price  at  which  it  is  provided  in  Sec- 
tion 32  hereof  that  the  city  may  acquire  the  property,  and 
that,  in  so  acquiring  the  property,  said  licensee  shall  agree 
to  hold  the  same  subject  to  all  the  terms  of  this  ordinance, 
including,  as  a valid  and  binding  condition,  the  right  of  the 
city  to  purchase  the  same,  as  hereinbefore  provided,  and  the 
right  of  the  city  thereafter  to  designate  any  other  licensee 
to  acquire  and  hold  the  same,  as  is  hereinbefore  provided; 
and  upon  the  designation  of  any  such  licensee  by  the  city, 
the  same  notice  shall  be  given  to  the  company  as  is  herein 
provided  to  be  given  in  the  event  of  the  city  exercising  the 
option  referred  to  in  Section  32  hereof,  and  the  same  mode 
of  transfer  as  is  herein  provided  in  case  of  purchase  by  the 
city  shall  apply  to  the  case  of  purchase  by  such  licensee. 
The  right  of  the  licensee  of  the  city  to  acquire  the  street- 
railway  system,  rights  and  property  by  purchase,  under  the 
provisions  of  this  ordinance,  shall  in  no  way  be  impaired 
by  any  lack  of  power  or  authority  on  the  part  of  the  city 
itself  to  acquire  the  said  street-railway  system,  rights  and 
property,  for  municipal  operation  and  use  or  otherwise. 

Before  any  such  licensee  as  is  herein  provided  shall  be 
designated,  the  city  shall  fix  a time  for  the  receipt  of  bids, 
and  shall  give  thirty  days’  public  notice  thereof.  At  the 
time  appointed,  proposals  shall  be  filed,  the  proposal  of  any 
applicant  other  than  the  company  being  accompanied  by 
$50,000  in  money,  as  a guaranty  of  its  good  faith.  If  no 
proposal  is  filed  by  the  company,  it  shall  be  deemed  to  pro- 
pose the  rate  of  return  then  authorized.  Should  the  com- 
pany file  a proposal  lower  than  its  then  authorized  rate, 

60 


such  proposal  being  as  low  as  any  other  filed,  the  same  shall 
be  accepted,  and  the  rate  therein  offered  shall  become  the 
authorized  rate  of  return,  unless  (1)  no  other  proposal  be 
filed,  or  (2),  another  proposal  having  been  filed  and  a li- 
censee designated,  no  purchase  is  made  by  such  licensee 
thereunder,  in  either  of  which  events  the  proposal  of  the 
company  shall  be  disregarded,  and  no  change  in  the  rate  of 
return  shall  be  required  by  reason  thereof.  All  proposals 
received  shall  be  opened  at  the  hour  fixed,  and  thereafter’ 
the  council  may  designate  as  licensee  any  bidder  whose  pro- 
posal is  in  accordance  with  the  conditions  hereinbefore  set 
forth.  Should  the  city  determine  not  to  designate  such 
licensee,  or  should  no  proposal  complying  with  the  condi- 
tions hereinbefore  provided  be  received,  the  city  shall  not 
again  give  notice  of  the  receipt  of  proposals  within  six 
months  thereafter.  Should  the  city  designate  such  licensee 
and  the  bidder  so  designated  fail  to  acquire  the  property 
and  to  comply  with  all  the  conditions  of  such  acquisition, 
as  stipulated  by  this  ordinance,  within  thirty  days  after  the 
expiration  of  the  six-months’  notice  hereinbefore  provided, 
unless  prevented  by  bona  fide  legal  proceedings  over  which 
he  has  no  control,  the  city  shall  declare  such  failure  by  reso- 
lution of  council,  and  upon  the  passage  of  such  resolution 
the  city  shall,  out  of  the  $50,000  deposited  by  such  default- 
ing bidder,  pay  to  the  company  any  loss  or  expense  which, 
in  the  opinion  of  the  council,  has  been  incurred  by  the  com- 
pany in  regard  to  the  filing  of  proposals  or  bids,  and  the 
balance  of  such  deposit  shall  become  the  property  of  the 
city,  and  shall  be  deposited  in  the  city  treasury  to  the  credit 
of  the  general  fund. 

Sec.  34.  Any  such  licensee,  in  the  acquisition  of  the 
property  under  the  provisions  of  Section  33  hereof,  shall  pay 
the  capital  value  of  said  property,  as  fixed  by  Section  16 
hereof,  less  bonded  or  floating  debts  paid  or  assumed,  plus 
ten  per  cent  of  the  difference,  and  shall  be  under  all  the  obli- 
gations provided  in  Section  32  hereof  for  the  city,  in  the 
event  of  purchase  by  the  city,  except  the  limitations  as  to 
the  mode  of  payment,  and  shall  assume  and  agree  to  pay, 
in  addition  to  the  price  stipulated,  all  the  obligations,  in- 
debtedness and  liabilities  of  the  company,  and  all  liens 
upon  its  property  then  existing,  other  than  bonded  indebted- 
ness, which  said  bonded  indebtedness  the  said  licensee  may 
assume,  it  being  understood  that  the  current  obligations, 
indebtedness  and  liabilities  of  the  company  shall  be  limited 
as  provided  in  Section  32  hereof,  and  that  any  excess  there- 
of shall  be  deducted  from  said  purchase  price. 

Sec.  35.  If,  at  the  expiration  of  this  grant,  or  any  re- 
newal therof,  the  city  shall  not  have  exercised  the  rights 
reserved  to  it  to  purchase  the  said  property  as  provided  in 
Section  32  hereof,  then  and  in  that  event  the  company,  by 

61 


the  acceptance  of  this  ordinance,  grants  to  the  city,  and  the 
city  hereby  reserves  to  itself,  the  rights  of  purchase  fol- 
lowing: 

(1)  If  the  city  then  has  legal  power  so  to  do,  it  may 
purchase  said  street  railroad  system  with  all  extensions  and 
additions  thereto  at  the  price,  in  the  manner,  and  on  the  terms 
set  forth  in  Section  32  of  this  ordinance,  except  that  ten  per 
cent,  shall  not  be  added  to  any  part  of  the  capital  value  to 
determine  the  purchase  price  to  be  paid. 

(2)  If  the  city  then  has  legal  power  to  acquire,  own 
and  operate  street  railways  within  the  then  city  limits,  it 
may  purchase  said  street  railroad  system  with  all  additions 
and  extensions  within  the  then  city  limits  at  the  price,  in  the 
manner,  and  on  the  terms  provided  in  Section  32  hereof, 
except  that  ten  per  cent  shall  not  be  added  to  any  part  of 
the  capital  value  to  determine  the  purchase  price ; and  ex- 
cept that  there  shall  be  deducted  from  the  total  price  of  the 
entire  system  the  value  of  such  part  of  said  street  railroad, 
with  all  extensions  and  additions,  lying  outside  of  the  then 
city  limits,  such  value  to  be  determined  by  agreement,  or 
in  event  of  a disagreement,  by  arbitration  as  provided  in 
Section  11  of  this  ordinance;  and,  if  the  city  so  desires,  it 
may,  at  the  same  time,  require  the  company  to  sell,  assign 
and  convey  to  such  person,  firm  or  corporation  as  may  be 
designated  by  the  city,  the  part  of  such  railroad  system 
then  lying  outside  of  the  then  limits  of  the  city  of  Cleveland 
at  the  value  as  so  fixed  by  agreement  or  arbitration. 

Sec.  36.  [Repealed.] 

Sec.  37.  If,  at  the  expiration  of  this  franchise,  no  ex- 
tension or  renewal  thereof  is  granted  by  the  city,  and  the 
city  does  not  then  purchase  the  property,  any  person  or  per- 
sons to  whom  a franchise  may  be  granted  to  operate  a rail- 
road over  the  then  existing  lines,  or  any  of  them,  or  any 
part  of  them,  shall  have  the  right,  and  be  under  obligation, 
to  purchase  said  railroad,  or  such  portion  thereof,  from  its 
then  owner,  upon  the  terms  herein  provided  for  purchase  by 
the  city  by  Section  35  hereof. 

Sec.  38.  The  company  shall  pay  to  the  city  three  thou- 
sand dollars  ($3,000)  per  year  for  the  use  of  the  city’s  tracks 
and  appliances  on  the  bridges,  viaducts  and  elsewhere,  the 
use  of  which  is  authorized  in  Section  2 hereof,  in  the  city, 
and  shall  renew,  maintain  and  keep  said  tracks  and  appli- 
ances in  constant  repair.  The  city  reserves  the  right,  how- 
ever, from  time  to  time  to  adjust  and  fix  the  sum  to  be  paid 
by  the  company  for  the  uses  herein  provided  by  ordinance 
of  the  council,  the  sum  so  to  be  fixed,  however,  not  to  exceed 
at  any  time  an  amount  equal  to  six  per  cent  per  annum 
upon  the  cost  of  the  tracks  and  appliances  belonging  to  the 
city  so  used,  and  imposing  and  continuing  upon  the  com- 
pany the  obligation  of  renewal,  maintenance  and  repair 

62 


above  provided.  Should  the  city  at  any  time  grant  to  any 
other  company  the  right  jointly  to  use  any  of  its  tracks  cov- 
ered by  this  section,  the  payments  to  be  made  to  the  city  for 
such  use  by  the  grantee  herein  and  such  other  company  or 
companies  shall  be  apportioned  by  the  city  as  the  council 
shall  deem  just,  the  aggregate  sums  paid  not  exceeding  the 
maximum  hereinbefore  provided  to  be  paid  by  the  company. 

Sec.  39.  Nothing  in  this  ordinance  contained  shall 
operate  as  an  abridgement  of  the  corporate  rights  or  powers 
of  the  company,  nor  of  the  discretion  of  its  board  of  direc- 
tors in  the  selection  of  managers  and  employes,  or  any  one 
performing  any  duties  imposed  upon  the  company  and  its 
officers  by  law ; nor  shall  anything  herein  contained  be 
deemed  a limitation  upon  the  amount  of  capital  stock  which 
shall  be  issued  by  the  company,  or  indebtedness  incurred  by 
it.  The  capital  valuation  fixed  by  Section  16  hereof  is  for 
the  sole  purpose  of  determining  the  return  to  the  company 
from  the  carriage  of  passengers,  and  for  the  purpose  of  fix- 
ing, from  time  to  time,  the  rate  of  fare  and  the  price  at  which 
the  purchase  of  the  property  of  the  company  may  be  made. 

Sec.  40.  The  company  shall  have  the  right,  whenever 
the  unexpired  term  of  this  grant  or  any  renewal  thereof 
shall  be  less  than  fifteen  years,  to  fix,  charge  and  collect  the 
maximum  rate  of  fare  provided  in  Section  22  hereof,  and 
during  said  period  the  right  to  control  the  schedules  for  the 
operation  of  cars  shall  be  in  the  company,  and  not  in  the 
city,  except  that  the  city  shall  not  be  deemed  to  have  sur- 
rendered its  police  power  to  require  such  proper  and  reason- 
able service  as  may  be  required  by  the  needs  of  the  traveling 
public.  During  such  fifteen  years,  or  any  portion  thereof, 
the  company  shall  continue  to  receive  the  sums  provided  by 
Section  16  hereof  out  of  the  interest  fund ; and  whenever  the 
amount  credited  to  the  interest  fund,  less  the  proportionate 
accrued  payments  to  be  made  therefrom,  shall  be  more  than 
$500,000  by  the  amount  of  $200,000,  the  excess  above  $500,- 
000  shall  be  by  the  company  applied  to  a reduction  of  the 
capital  value  of  the  company,  as  that  term  is  defined  in  Sec- 
tion 16  hereof,  as  follows : 

First : By  the  payment  of  any  then  outstanding  float- 

ing indebtedness  of  the  company  ; 

Second:  By  the  payment  of  any  bonds  then  outstand- 
ing of  the  company  which  can  at  such  time,  according  to 
the  conditions  of  the  mortgage  under  which  such  bonds 
were  issued,  be  paid; 

Third : By  creating  a sinking  fund  to  assist  in  securing 
a reduction  of  capital  value,  such  sinking  fund  to  be  in- 
vested in  securities,  with  the  approval  of  the  city ; and  after 
the  paymnet  of  any  such  floating  indebtedness  or  bonds,  the 
capital  value,  as  that  term  is  defined  by  Section  16  hereof, 

63 


shall  be  reduced  by  the  amount  so  paid,  and  there  shall  be 
no  payments  made  thereon  out  of  the  interest  fund. 

Should  the  city  pass  a grant  in  renewal  hereof  during  a 
period  of  less  than  fifteen  (15)  years  franchise  duration, 
such  renewal  grant  shall  fix  as  the  then  capital  value  of  the 
company,  upon  which  interest  shall  be  paid  out  of  the  inter- 
est fund,  an  amount  equal  to  the  capital  value  set  forth  in 
Section  16  hereof,  increased  as  in  this  ordinance  provided 
and  diminished  by  any  reduction  thereof  out  of  surplus 
earnings  or  otherwise  as  in  this  ordinance  provided,  and 
also  diminished  by  the  proceeds  of  the  assets  or  securities 
then  in  the  sinking  fund  provided  for  by  this  section,  which 
assets  or  securities  shall  be  by  the  company  converted  into 
cash  at  the  best  price  obtainable. 

Sec.  41.  At  any  time  after  the  taking  effect  of  this 
ordinance,  the  city  shall  have  the  right  to  pass  an  ordinance 
in  renewal  of  the  rights  hereby  granted  for  such  period,  not 
less  than  fifteen  years,  nor  less  than  the  then  unexpired 
term  of  this  grant,  as  the  city  may  by  law  be  authorized  to 
make ; and  upon  the  passage  of  any  such  renewal  ordinance, 
imposing  upon  the  company  no  substantial  burden,  as  de- 
fined in  Section  43  hereof,  in  addition  to  those  imposed  in 
this  ordinance,  the  company  shall  at  once  accept  the  same, 
and  upon  its  failure  or  refusal  to  accept  the  same,  the  pro- 
visions of  Section  40  hereof  shall  cease  to  operate,  and  the 
city  shall  resume  and  have  unimpaired  all  the  powers  as  to 
regulation  of  schedules  and  operation  provided  by  Section  9 
hereof,  and  the  rates  of  fare  shall  continue  to  be  those  fixed 
by  the  city  council,  or  by  arbitration,  under  various  provi- 
sions of  this  ordinance,  without  reference  to  the  provisions 
of  Section  40. 

Sec.  42.  Should  the  duration  of  this  grant,  or  any 
grant  made  in  renewal  hereof,  come  to  have  less  than  fif- 
teen years’  unexpired  time  to  run,  and  the  company,  under 
the  provisions  of  Section  40  hereof,  install  the  maximum 
rate  of  fare,  the  council  may  still  pass  such  renewal  grant 
as  is  herein  provided,  and  the  company  shall  continue  un- 
der obligation  to  accept  the  same,  under  the  terms  and  pro- 
visions of  this  section,  and  upon  aceptance  shall  become 
subject  to  the  terms  therof,  as  though  it  had  not  operated 
under  the  provisions  of  Section  40  hereof. 

Sec.  43.  Any  ordinance  passed  in  renewal  hereof  shall 
be  deemed  not  to  impose  any  substantial  burden  upon  the 
company  in  addition  to  those  imposed  by  this  ordinance 
when  such  renewal  ordinance  is  either  identical  in  terms 
with  this  ordinance,  except  as  to  the  time  of  expiration,  or 
that  the  right  reserved  to  the  city  in  Section  33  hereof  may 
in  such  renewal  ordinance  be  made  continuously  operative 
from  and  after  January  1,  1918,  or  differs  from  this  ordinance 

64 


in  such  particulars  only  as  may  be  agreed  upon  between 
the  city  and  the  company. 

Sec.  44.  Should  the  city  not  have  exercised  the  right 
reserved  to  it  in  Section  32  hereof  by  purchasing  the  street 
railway  property  on  or  before  the  first  day  of  January,  1933, 
then,  on  said  first  day  of  January,  1933,  the  city  having  pre- 
viously given  one  year’s  notice  of  its  intention  to  enforce 
this  section,  the  line  of  street  railroad  now  known  as  the  St. 
Clair  Avenue  line,  beginning  at  West  9th  Street  and  extend- 
ing through  St.  Clair  Avenue,  N.  W.,  and  St.  Clair  Avenue 
N.  E.,  to  East  105th  Street,  with  all  the  physical  property, 
rails,  ties,  poles,  trolley-,  span-,  guy-  and  feed-wires  and 
other  fixed  appliances  in  place  in  said  St.  Clair  Avenue, 
N.  W.,  and  St.  Clair  Avenue,  N.  E.,  shall,  upon  the  city  ten- 
dering to  the  company  the  physical  value  thereof,  be  and 
become  the  property  of  the  city  of  Cleveland,  and  the  oper- 
ation of  any  grant  or  franchise  then  in  force  with  relation 
thereto  shall  cease  and  determine,  and  the  owning  company 
shall  have  no  right  of  any  kind  with  regard  thereto.  In  the 
event  the  city  and  the  company  disagree  as  to  the  physical 
value  of  said  St.  Clair  Avenue  line,  the  same  shall  be  deter- 
mined by  arbitration  in  the  manner  provided  in  Section  11 
hereof.  If,  on  said  first  day  of  January,  1933,  the  city  shall 
not  have  the  right  to  own  such  property,  or,  having  such 
right,  determine  not  to  exercise  it,  then  the  said  property 
shall  pass,  upon  making  the  same  payment  therefor  as  is  re- 
quired from  the  city,  in  case  it  had  and  exercised  the  right 
to  acquire  this  property,  to  such  person  as  the  city  council 
shall  by  resolution  have  designated  to  become  the  owner 
thereof;  and  the  vesting  of  this  property  in  such  person  so 
designated  shall  not  be  affected  by  any  incapacity  on  the 
part  of  the  city  itself  to  own  such  property;  and  in  consid- 
eration of  the  rights  and  privileges  by  this  ordinance  granted 
to  the  company,  the  company  does  hereby  agree  that,  in  the 
event  stipulated,  it  will,  on  the  said  first  day  of  January, 
1933,  execute  all  necessary  deeds,  covenants,  assignments 
and  other  documents  which  may  be  necessary  to  confer  upon 
the  city  or  the  city’s  licensee  the  absolute  right,  title  and 
interest  in  and  to  all  the  property  described  in  this  section  to 
be  on  said  day  so  set  over,  transferred  and  conveyed. 

Sec.  45.  In  case  of  any  failure  of  the  company  to  do 
and  perform  each  and  every  one  of  the  terms  and  conditions 
herein  stipulated  to  be  performed  by  it,  and  failure  to  com- 
ply with  the  general  ordinances  of  the  city  of  Cleveland 
relating  to  street  railroads,  now  or  hereafter  in  force,  and 
not  inconsistent  with  the  specific  provisions  of  this  ordi- 
nance, and  such  failure  shall  continue  for  six  months  after 
written  notice  to  the  company  from  the  city  of  its  intention 
to  exact  a forfeiture  by  reason  of  such  failure,  the  company 
shall  thereupon  forfeit  all  and  singular  the  rights  and  privi- 

65 


leges  herein  granted,  and  thereafter  all  such  rights  and  privi- 
leges shall  cease ; and  such  forfeiture  shall  be  declared  and 
enforced  in  the  manner  provided  in  Section  1891  of  the  Re- 
vised Ordinances  of  the  city  of  Cleveland  of  1907. 

Sec.  46.  The  acceptance  of  this  ordinance  by  the  com- 
pany in  the  manner  hereinafter  provided,  and  the  ratifica- 
tion thereof  by  the  stockholders  of  the  company  prior  to  Feb- 
ruary 10,  1910,  and  the  taking  effect  of  this  ordinance,  shall 
be  and  constitute  a surrender,  termination  and  cancellation 
of  all  the  grants  and  franchises,  of  every  kind,  character  and 
description,  received,  acquired  or  owned  by  any  of  the  com- 
panies required  by  this  section  to  sign  the  acceptance  hereof, 
from  the  city  of  Cleveland  or  from  any  other  source  of  au- 
thority, to  operate  the  street-railroad  system,  or  any  part 
thereof,  hereinbefore  mentioned,  within  the  present  limits  of 
the  city  of  Cleveland,  and  shall  be  a contract  between  the 
city  of  Cleveland  and  The  Cleveland  Railway  Company,  a 
contract  between  The  Cleveland  Railway  Company  and  The 
Forest  City  Railway  Company,  The  Municipal  Traction 
Company,  The  Low  Fare  Railway  Company,  and  The  Neu- 
tral Street  Railway  Company,  superseding  and  cancelling 
all  other  relations  between  them,  except  such  as  passed  title 
to  said  The  Cleveland  Railway  Company  or  The  Cleveland 
Electric  Railway  Company ; and,  for  and  in  consideration  of 
the  privileges  granted  by  this  ordinance,  The  Cleveland 
Railway  Company,  by  the  acceptance  hereof,  shall  assume 
and  carry  out,  pay  and  perform,  all  of  the  obligations,  cove- 
nants and  conditions  by  this  ordinance  imposed  upon  the 
company,  and  shall  extend  to,  respect  and  carry  into  effect 
all  rights  reserved  by  the  city  of  Cleveland  or  granted  to  the 
city  of  Cleveland  by  the  Company  by  the  terms  hereof,  or 
granted  to  or  imposed  upon  the  company  by  the  terms 
hereof;  and  such  acceptance  shall  be  in  writing,  filed  with 
the  city  clerk  within  five  days  after  the  passage  of  this  ordi- 
nance, in  the  following  form,  and  such  acceptance  shall  take 
effect  upon  the  taking  effect  of  this  ordinance : 

“Cleveland,  Ohio, , 1909. 

“The  Cleveland  Railway  Company  hereby  accepts  the 

terms  of  Ordinance  No.  , passed  on  the  

day  of , 1909,  by  the  council  of  the  city  of 

Cleveland,  granting  a renewal  of  the  street-railway  rights  of 
The  Cleveland  Railway  Company,  fixing  the  terms  and  con- 
ditions of  such  renewal  grant,  changing  the  rates  of  fare, 
regulating  transfers  and  terminating  existing  grants ; and,  as 
consideration  moving  from  The  Cleveland  Railway  Company 
to  the  city  of  Cleveland  for  the  passage  of  such  ordinance 
and  the  rights  thereby  granted  by  the  city  of  Cleveland  to  said 
company,  The  Cleveland  Railway  Company  does  hereby  sur- 

66 


render  and  terminate  all  its  grants  and  franchises,  of  every 
kind,  character  and  description,  received,  acquired  or  owned 
by  it,  or  its  predecessors,  from  the  city  of  Cleveland,  or  any 
other  source  of  authority,  to  operate  street  railways  within 
the  present  limits  of  the  city  of  Cleveland;  and  The  Cleveland 
Railway  Company,  for  said  consideration  and  for  the  sur- 
render hereinafter  specified  by  The  Low  Fare  Railway  Com- 
pany, The  Forest  City  Railway  Company,  The  Municipal 
Traction  Company  and  The  Neutral  Street  Railway  Company, 
does  hereby  assume,  and  agree  to  carry  out,  pay  and  perform 
all  the  obligations,  covenants  and  conditions  of  said  ordinance, 
and  to  extend  to,  respect  and  carry  into  effect  all  rights  re- 
served therein  by  the  city  of  Cleveland  or  granted  to  said  city 
by  The  Cleveland  Railway  Company  by  the  terms  thereof; 
and,  as  consideration  moving  from  The  Cleveland  Railway 
Company  for  the  surrender  by  The  Low  Fare  Railway  Com- 
pany, The  Forest  City  Railway  Company,  The  Municipal 
Traction  Company  and  The  Neutral  Street  Railway  Company 
of  all  claims,  demands  and  rights  against  The  Cleveland  Rail- 
way Company  of,  in  or  to  any  of  the  properties,  lines  or  grants 
referred  to  in  this  ordinance,  The  Cleveland  Railway  Com- 
pany hereby  assumes  and  agrees  to  pay  the  debts  now  existing 
of  said  The  Low  Fare  Railway  Company,  The  Forest  City 
Railway  Company,  The  Municipal  Traction  Company  and  The 
Neutral  Street  Railway  Company,  as  specified  in  said  ordi- 
nance; and,  in  consideration  thereof,  said  The  Low  Fare  Rail- 
way Company,  The  Forest  City  Railway  Company,  The 
Municipal  Traction  Company  and  The  Neutral  Street  Railway 
Company  hereby  release  said  The  Cleveland  Railway  Company 
from  all  claims  and  demands  whatsoever,  and  suneender  to  it 
all  claim  to  or  rights  which  they,  or  any  of  them,  may  have 
in  or  to  any  of  the  property,  lines  or  routes  referred  to  in 
the  above  ordinance,  or  in  the  hands  of  the  receiver,  or  against 
one  another,  and  agree  to  execute  and  deliver  to  The  Cleve- 
land Railway  Company  all  such  instruments  as  may  be  neces- 
sary to  effectuate  the  same. 


THE  CLEVELAND  RAILWAY  COMPANY, 


By 


President, 


Secretary. 


THE  LOW  FARE  RAILWAY  COMPANY, 

By  , 

President, 

y 

Secretary. 

67 


THE  FOREST  CITY  RAILWAY  COMPANY, 

By  , 

President, 


Secretary. 


THE  MUNICIPAL  TRACTION  COMPANY, 
By  , 


President, 


Secretary. 

THE  NEUTRAL  STREET  RAILWAY  COMPANY, 
By  , 

President, 


Secretary. 

Sec.  47.  The  purpose  of  this  ordinance  is  to  establish 
and  settle  the  relations  between  the  city  of  Cleveland  and  The 
Cleveland  Railway  Company  by  a contract  which  will  secure 
to  The  Cleveland  Railway  Company,  unimpaired,  the  capital 
value  described  in  Section  16  hereof,  and  the  rates  of  return 
thereon  provided  in  said  section,  and  which  will  also  secure 
to  the  city  of  Cleveland  adequate  and  efficient  service  at  the 
in  Section  22 ; and  the  provisions  of  this  ordinance  in  respect 
cost  thereof,  not  exceeding  the  maximum  rate  of  fare  specified 
to  the  fixing,  from  time  to  time,  of  rates  of  fare  to  be  charged 
by  the  company,  the  provisions  in  respect  to  the  ascertainment 
of  the  value  of  the  property  of  the  company  and  the  items 
from  time  to  time  constituting  the  capital  value  thereof,  the 
provisions  in  reference  to  the  designation  of  the  city  street 
railroad  commissioner  and  the  duties  to  be  performed  by  him, 
the  provisions  with  respect  to  the  right  and  power  of  the  city, 
through  the  city  street  railroad  commissioner  or  otherwise,  to 
be  informed,  by  inspection  of  the  books,  papers,  documents, 
vouchers  and  property  of  the  company,  as  to  the  value  of  said 
property  and  the  cost  of  service,  and  the  provisions  in  respect 
to  the  acquisition  of  the  property  of  the  company  by  the  city, 
or  by  a purchaser  designated  by  the  city  therefor,  as  set  forth 
in  the  several  sections  of  this  ordinance  dealing  with  said  sub- 
jects, are  mutually  understood  and  declared  to  be  in  their 
substance  material  to  the  accomplishment  of  the  aforesaid 
purpose  for  which  this  contract  is  made;  but  nevertheless,  in 
order  to  avoid  an  entire  failure  of  this  grant  in  consequence 
of  invalidity  of  any  of  the  aforesaid  provisions,  it  is  further 
provided  as  follows: 

1.  If  any  material  part  of  the  provisions  of  this  ordi- 
nance in  respect  to  the  fixing,  from  time  to  time,  of  the  rates 
of  fare  to  be  charged  by  the  company,  including  the  submis- 

68 


sion  of  such  rates  of  fare  to  arbitration  in  case  of  disagree- 
ment between  the  parties,  shall  be  adjudged  to  be  invalid,  then, 
except  as  provided  in  Section  40,  all  of  the  provisions  hereof 
respecting  the  increase  or  decrease  of  fare,  after  the  expira- 
tion of  the  period  during  which  the  initial  rate  of  fare  is  to 
continue  in  force,  as  prescribed  by  Section  23,  shall  be  abro- 
gated, and,  in  lieu  thereof,  the  council  of  the  city  of  Cleveland 
shall  have  power,  from  time  to  time,  to  fix  by  ordinance  the 
rate  of  fare  to  be  charged  by  the  company  for  the  transporta- 
tion of  passengers,  not  exceeding  the  maximum  rate  specified 
in  Section  22 ; but  the  council  shall  not  at  any  time  decrease 
the  rate  of  fare  unless  there  shall  then  be  a sum  exceeding 
$500,000  in  the  interest  fund ; and  any  rate  of  fare  so  fixed 
by  the  council  shall  not  impair  the  ability  of  the  company  to 
earn  sufficient  money  to  meet  the  payments  provided  for  in 
Sections  16  and  18  hereof,  after  paying  operating  expenses 
and  maintenance  and  such  other  allowances  for  depreciation 
and  renewals  as  may  from  time  to  time  be  made  pursuant  to 
the  provisions  of  this  ordinance. 

2.  If  any  material  part  of  the  provisions  of  this  ordi- 
nance providing  for  the  settlement  or  decision  by  arbitration 
of  questions  other  than  the  increase  or  decrease  of  the  rate 
of  fare  which  may  arise  between  the  city  and  the  company 
shall  be  adjudged  to  be  invalid,  then,  as  to  any  such  question 
thereafter  arising  between  the  parties,  and  which,  by  the  terms 
hereof,  is  to  be  so  submitted  to  arbitration,  the  council  of  the 
city  of  Cleveland  shall  be  substituted  for  the  board  of  arbitra- 
tion by  this  ordinance  provided,  and  the  said  council  shall  be 
empowered  to  determine  such  question  in  accordance  with  the 
rules  and  principles  herein  prescribed,  so  far  as  the  same  may 
be  applicable,  and  its  action  shall  be  binding  on  both  parties, 
unless  the  same  shall  be  annulled  or  modified  by  a court  of 
competent  jurisdiction;  and  if  the  question  involved  be  in 
reference  to  service,  the  company  shall  at  once  install  the  kind 
of  service  directed  by  the  council  until  such  court  shall  other- 
wise order. 

3.  If,  at  any  time,  the  provisions  of  this  ordinance  for 
the  designation  of  a city  street  railroad  commissioner  shall 
be  held  invalid,  or  if,  at  any  time,  there  shall  be  no  city  street 
railroad  commissioner,  the  city  may  designate  the  city  auditor, 
or  any  other  officer  or  employe  of  the  city,  to  perform  all  the 
duties,  and  to  have  all  the  rights,  privileges  and  powers,  in  this 
ordinance  described  as  appertaining  to  the  city  street  railroad 
commissioner. 

4.  In  case,  however,  the  city,  having  legal  authority  so 
to  do,  shall  determine  to  purchase  and  take  over  the  property 
of  the  company,  or  a part  thereof,  or  in  case  the  city  shall 
designate  a licensee  to  purchase  the  same,  as  provided  in  Sec- 
tions 32,  33  and  44,  refusal  by  the  Company  to  comply  with 

69 


any  material  provisions  of  said  sections,  or  any  of  them,  or 
of  any  other  provision  of  this  ordinance  designed  to  carry  out 
such  purchase  by  the  city,  or  by  such  purchaser,  whether  on 
the  ground  that  the  same  are  not  binding  on  it  or  for  any  other 
reason,  shall  work  a forfeiture  of  the  grant  made  by  this 
ordinance. 

Sec.  48.  This  ordinance  shall  take  effect  and  be  in  force 
from  and  after  its  passage  and  legal  publication,  and  the  filing 
of  an  acceptance  in  writing,  as  hereinbefore  provided. 


Repealing  Clause — Ordinance  No.  20890B. 

Sec.  14.  The  council  reserves  the  right,  by  ordinance,  to 
repeal  this  ordinance  (being  Ordinance  No.  20890B)  and 
thereby  to  repeal  all  the  rights,  privileges,  grants  and  amend- 
ments hereby  made,  if,  within  a reasonable  time  after  the 
passage  hereof,  the  Cleveland  Railway  Company,  its  successors 
or  assigns,  shall  not  have  provided  the  sum  of  Two  Million 
Five  Hundred  Thousand  Dollars  ($2,500,000)  for  expendi- 
ture in  such  extensions,  betterments  or  permanent  improve- 
ments as  may  be  designated  by  the  city  in  accordance  with  the 
stipulations  and  requirements  of  Section  4 hereof  (Section  28 
herein). 


EXHIBIT  No.  5. 

AUDITOR  KILFOYLE’S  STATEMENT 
of 

Actual  Expenses,  Taxes,  Interest,  Allowances  for  Expense 
Overdrafts  and  Gross  Income  for  Ordinance- Year 
Ended  February  28,  1918, 
and 

Estimate  for  Ordinance-Year  Ending  February  28,  1919. 


1917-1918 

1918-1919 

Obsolete  Equipment  . . . . 

$ 544,000.00 

$ 744,000.00 

Maintenance  Expenses  . . 

2,132,954.85 

2,559,546.00 

Operating  Expenses 

5,609,175.85 

6,170,093.00 

Taxes 

648,424.83 

680,846.00 

Interest 

1,938,433.19 

1,996,586.00 

Allowance  for  Expense 

over- 

draft  

438,158.19 

646,047.00 

Total 

$11,311,146.91 

$12,797,118.00 

Gross  Income 

10,390,708.22 

11,871,384.00 

Deficit 

$ 920,438.69 

$ 925,734.00 

70 


EXHIBIT  No.  6. 


PASSENGER  REVENUE 

Per  Passenger-Car-Mile  (in  Cents)  in  April  1917  and  1918. 


Route. 

1918. 

1917. 

Abbey  Avenue  

18.28* 

.00* 

Bridge  Avenue 

33.00 

30.03 

Broadway 

29.83* 

26.71* 

Cedar  Avenue 

40.41 

35.79 

Central  Avenue 

41.10 

38.57 

Clark  Avenue 

19.98* 

.00* 

Clifton  Boulevard  

21.32* 

19.15* 

Detroit  Avenue 

31.13* 

28.45 

East  9th  Street 

8.64* 

8.97* 

East  55th  .Street 

33.35 

28.13 

East  79th  Street 

33.64 

31.03 

East  105th  Street 

26.03* 

23.15* 

Euclid  Avenue 

34.46 

26.04* 

Euclid  Heights 

28.96* 

23.76* 

Euclid  Creek 

50.48 

38.63 

Fairfield  Avenue 

34.70 

33.83 

Fulton  Road 

22.80* 

20.97* 

Harvard-Denison 

21.58* 

16.45* 

Kinsman  Road 

32.39 

30.49 

Lorain  Avenue 

35.71 

30.32 

Nottingham 

21.70* 

18.61* 

Payne  Avenue 

42.38 

37.48 

Pearl  Road 

12.93* 

10.61* 

Scovill  Avenue 

36.38 

33.64 

Scranton  Avenue 

28.79* 

24.32* 

St.  Clair  Avenue 

31.23* 

28.05 

Superior  Avenue  

36.94 

32.49 

Union  Avenue 

30.47* 

23.02* 

Union  Depot 

37.47 

33.60 

Wade  Park  Avenue 

31.61* 

27.43* 

West  14th  Street 

29.80* 

29.78 

West  25th  Street 

36.53 

31.06 

West  35th  Street 

18.77* 

15.17* 

Woodland  Avenue 

36.65 

32.80 

Average 32.16  28.05 


*Below  cost. 


71 


EXHIBIT  No.  7. 


PASSENGER  REVENUE 

Per  Passenger-Car-Mile  (in  Cents)  in  the  First  Four 
Months  of  1917  and  1918. 


Route. 

1918. 

1917. 

Abbey  Avenue 

19.65* 

19.99* 

Bridge  Avenue 

31.38 

30.22 

Broadway 

27.98* 

26.91* 

Cedar  Avenue 

38.45 

35.80 

Central  Avenue 

39.75 

37.74 

Clark  Avenue 

19.40* 

.00* 

Clifton  Boulevard  

20.63* 

20.23* 

Detroit  Avenue 

30.02* 

29.19 

East  9th  Street 

8.26* 

9.05* 

East  55th  Street 

32.53 

28.57 

East  79th  Street 

32.42 

30.72 

East  105th  Street 

26.05* 

23.10* 

Euclid  Avenue 

32.23 

26.33* 

Euclid  Heights 

28.37* 

24.35* 

Euclid  Creek 

47.75 

38.27 

Fairfield  Avenue 

33.41 

33.80 

Fulton  Road 

22.39* 

21.46* 

Harvard-Denison 

20.86* 

16.51* 

Kinsman  Road 

31.47 

29.93 

Lorain  Avenue 

34.10 

30.44 

Nottingham 

20.63* 

16,84* 

Payne  Avenue 

41.22 

37.59 

Pearl  Road  

12.40* 

9.66* 

Scovill  Avenue 

34.80 

32.94 

Scranton  Avenue 

28.32* 

23.76* 

St.  Clair  Avenue 

29.45* 

29.68 

Superior  Avenue 

34.76 

32.40 

Union  Avenue 

29.78* 

23.18* 

Union  Depot 

37.99 

31.58 

Wade  Park  Avenue 

30.52* 

26.86* 

West  14th  Street 

29.26* 

29.58 

West  25th  Street 

36.11 

34.78 

West  35th  Street 

18.44* 

15.59* 

Woodland  Avenue 

34.97 

32.70 

Average 

30.94 

28.45 

* Below  cost. 


72 


EXHIBIT  No.  8. 


Address  of  Hon.  Robert  W.  Tayler  at  Sixtieth  Annual  Din- 
ner of  the  Cleveland  Chamber  of  Commerce, 
February  26,  1910. 

Mr.  President  and  Gentlemen  of  the  Chamber: 

Lest  the  apprehension  that  your  Chairman  just  expressed 
is  justified,  I want  to  say  a few  words,  not  so  much  about 
the  street-railroad  troubles  as  about  the  hopes  we  have  that 
the  street-railroad  troubles  are  over. 

Several  things  have  occurred  to  me  as  I sat  here  and 
listened  to  that  most  instructive  and  persuasive  address  of 
Mr.  Brown,  and  the  beautiful  and  informing  address  of  Bishop 
Farrelly.  But  the  time  that  is  at  my  disposal  now  is  not  more 
than  I wish  to  use  in  telling  you  something  about  the  street- 
railroad  situation  and  our  hopes  concerning  it. 

I ought,  however,  to  voice  the  general  disappointment, 
which  I know  you  all  share  with  me,  that  after  that  prolonged 
private  conference  which  has  just  occurred  in  the  presence  of 
all  of  us,  between  Mr.  Brown  and  Mayor  Baehr,  we  did  not 
hear  from  the  lips  of  Mr.  Brown  a definitive  statement  about 
the  Union  Depot.  I came  here  tonight  fully  expecting  that 
there  would  be  a proclamation  of  the  settlement  also  of  our 
Union  Depot  problem.  I suppose,  after  all,  the  only  way  to 
get  one,  after  the  failure  of  tonight,  will  be  to  get  a new 
president  of  that  railroad  and  a new  mayor  of  Cleveland. 

But  as  to  the  subject  that  I desire  to  talk  about.  First, 
a word  or  two  about  the  fundamentals  of  this  settlement.  The 
principle  is  very  simple  and  venerable,  because  it  is  righteous- 
ness. The  street-railway  settlement  is  bottomed  upon  one 
thing,  upon  which  no  street-railroad  problem  or  situation  has 
ever  before  rested,  and  that  is,  so  far  as  human  endeavor  can 
make  it,  justice  to  the  community  and  justice  to  the  people  who 
furnish  the  money  wherewith  the  community  gets  its  local 
transportation. 

The  streets  belong,  in  the  largest  sense,  to  the  people.  And 
they  ought  always  to  belong  to  the  people;  they  ought  never 
to  be  given  away  to  anybody  else.  But,  in  the  very  nature 
of  things,  the  uses  to  which  the  streets  are  put  are  such  that 
no  individual  or  ordinary  community  effort  can  furnish  all 
that  the  community  needs,  and  therefore  men  are  called  upon 
to  invest  their  money  in  furnishing  the  means  whereby  trans- 
portation through  the  city  may  be  supplied.  Now,  in  a primi- 
tive community,  relatively  to  a community  like  this,  we  have 
a different  problem;  but  in  a great  community  of  this  sort, 
where  the  number  of  people  who  must  be  transported  daily 
back  and  forth  is  pretty  certainly  established,  the  problem  is 

73 


not  primitive,  and  its  nature  is  radically  clear-cut.  And  so  it 
becomes  possible,  in  any  just  method  by  which  the  question  is 
answered,  to  arrange  that  the  community,  which  owns  the 
streets,  shall  continue  to  own  them,  and  that  the  people  who 
furnish  that  which  the  people  want  will  get  a full  reward  for 
the  work  that  they  do.  All  other  systems,  which  fail  to  recog- 
nize those  fundamental  rights  and  fundamental  principles,  are 
fundamentally  wrong. 

Now,  if  we  have  (as  I am  sure  we  do  have)  the  element 
of  eternal  justice  in  this  settlement,  then,  of  course,  we  have 
done  right. 

In  an  established  community  such  as  we  have  here  the 
principle  which  I have  asserted  as  fundamentally  right  can  be, 
theoretically,  at  least,  easily  applied,  by  giving  to  the  com- 
munity service  at  the  cost  of  the  service;  and  that  is  what  this 
plan  and  this  ordinance  design  and  declare  in  specific  terms. 

Now,  that  is  all  I am  going  to  say  about  the  fundamentals, 
except  this  general  observation  collateral  to  it:  That  when- 

ever it  is  established  in  the  public  mind  that  the  public  are 
getting  what  they  pay  for,  and  that  the  people  who  furnish 
what  they  get  are  getting  all  that  they  can  righteously  claim 
for  it,  we  will  find  a reversal  in  the  attitude  of  the  one  toward 
the  other.  Whereas  distrust  and  lack  of  confidence  charac- 
terize, and  always  will  characterize,  the  sort  of  conditions 
which  normally  prevail  in  street-railway  problems,  we  will,  in 
these  new  conditions,  ultimately  have  confidence,  we  will  have 
a relation  that  makes  for  peace,  we  will  have  that  condition 
of  mind  which  must  always  follow  when  both  sides  feel  that 
justice  is  being  done.  And  injustice  has  often  been  done  to 
those  who  have  furnished  the  sinews  of  war  whereby  intra- 
mural transportation  was  furnished,  because,  in  the  breasts 
of  those  who  did  not  know  what  was  going  on,  there  was  a 
feeling  that  they  were  not  getting  what  they  paid  for,  and  that 
somebody  else  was  getting  more  than  he  was  entitled  to  get. 
When  you  have  that  spirit,  you  have  the  seeds  of  eternal  dis- 
sension. 

Now,  something  about  the  mechanism  of  this  particular 
plan,  and  the  ordinance  which  has  been  provided  to  carry  it 
out.  First  of  all,  there  had  to  be  a determination  of  the  ques- 
tion, “What  is  the  value  of  the  investment  owned  by  the  people 
who  have  furnished  the  system?  And  what  is  the  return,  or 
the  basis  upon  which  they  are  entitled  to  a return?”  Until 
that  is  settled  with  fair  satisfaction  to  the  community,  you  have 
not  eliminated  the  chief  difficulty  that  arises.  In  this  instance 
we  have,  as,  of  course,  I think,  and  as  I am  quite  sure  the 
community  as  a whole  believes,  a reasonably  fair  determina- 
tion of  the  value  of  the  property,  upon  which  the  owners  are 
entitled  to  a full  and  just  return. 

There  are  some  incidents  related  to  the  mechanism  to 


74 


which  only  a passing  reference  can  be  made — the  provision, 
for  instance,  in  a certain  contingency,  for  a sinking  fund  to 
retire  the  bonds  and  other  securities.  There  is  a provision 
also  in  the  ordinance  covering  the  contingency,  if  it  shall  ever 
arise,  when  six  per  cent,  shall  be  deemed  to  be  an  abnormally 
high  rate  of  return,  so  that  the  ordinance  will  automatically 
correct  itself,  and  the  rate  of  interest,  if  that  contingency 
arises,  be  reduced.  Those  are  necessary  elements  in  any  me- 
chanical contrivance  to  provide  for  conditions  which  we  can- 
not now  certainly  foresee. 

A maximum  rate  of  fare,  although  not  in  principle  neces- 
sary in  this  ordinance,  is  fixed  at  seven  tickets  for  twenty-five 
cents,  with  a cent  charge  for  a transfer.  Philosophically,  no 
franchise  can  be  sold,  with  propriety  either  to  the  seller  or  the 
buyer,  which  fixes  an  arbitrary  or  inflexible  rate  of  fare;  and 
that  is  the  vice  of  nearly  all  of  the  street-railway  ordinances, 
I suppose,  in  the  communities  of  this  country.  There  is  no 
more  soundness  of  business  conduct  in  giving  a franchise  which 
declares  that  the  rate  of  fare,  in  Ohio,  for  instance,  where  the 
extreme  life  of  a franchise  is  twenty-five  years,  is  three  cents 
or  four  cents  or  five  cents,  than  there  would  be  if  the  blast- 
furnace proprietors  of  the  Mahoning  Valley  should  today  buy 
their  ore  supply  for  the  next  twenty-five  years  at  a given  price ; 
they  either  pay  too  much  or  too  little,  because  it  is  beyond  the 
possibility  of  human  wisdom  to  say  what,  for  that  great  period 
of  time,  will  be  the  fair  price  of  that  commodity  which  Nature 
furnishes  us.  Who  knows  what  the  service  or  the  cost  of 
service  in  the  City  of  Cleveland  will  be  ten,  fifteen  or  twenty 
years  from  now?  Three  cents  may  be  as  extravagant  a rate 
of  fare  then  as  ten  cents  would  be  now.  Five  cents  may  be 
as  low  a rate  of  fare  then  as  two  cents  would  be  now.  It  all 
depends  upon  the  cost  of  then  furnishing  that  thing  which  the 
people  demand.  If  it  should  be  true,  as  we  discover  the  specu- 
lations in  the  newspapers,  that  a new  method  of  supplying 
electric  current  has  been  devised,  whereby  the  cost  is  reduced 
sixty  per  cent.,  the  cost  of  moving  cars  will  be  reduced.  If 
it  should  be  discovered  that  cars  carrying  twice  as  many  pas- 
sengers could  as  easily  be  carried  over  these  tracks,  that  it 
would  not  require  two  men  to  operate  a car — that  an  infinity 
of  other  things  which  we  now  see  present  in  the  practical 
conduct  of  a street  railroad  are  not  necessary — then  who  can 
say  what  the  cost  of  transportation  will  then  be?  And  who 
is  it  that  can  put  a limit  to  the  accomplishment  of  human 
ingenuity?  Who  can  say  that  we  now  see  the  limit  of  cost 
of  the  thing  that  is  thus  furnished?  And,  on  the  other  hand, 
who  can  say  what  is  the  limit  by  way  of  added  expense  to  the 
furnishing  of  the  thing  that  we  must  have?  In  this  city,  every 
day  in  the  year,  approximately  five  hundred  thousand  people, 
on  an  average,  are  carried  on  our  street-cars;  or  that  will  be 

75 


the  average,  at  all  events,  for  the  next  five  or  six  years ; and 
they  must  be  carried  in  some  form  and  by  some  conveyance 
or  other.  And  no  man  can  say  how  much  it  is  going  to  cost. 

But  when  this  community  has  brought  itself  to  the  point 
where  it  knows  that  it  is  getting  the  kind  of  transportation 
that  it  needs  and  wants  and  demands,  and  that  that  transpor- 
tation is  costing  them  just  what  it  costs  the  people  who  produce 
it,  allowing  those  who  produce  it  a full  and  fair  return,  and 
no  more,  upon  their  investment,  they  will  care  mighty  little 
what  is  the  rate  of  fare.  There  are  few  who  are  unwilling  to 
pay  that  which  they  know  to  be  fair.  But  today  they  do  not 
know  what  is  fair ; and  it  will  take  months — years — for  them 
to  learn,  or  to  accustom  themselves  to  the  state  of  mind  which 
induces  them  to  believe  that  they  do  know,  what  this  transpor- 
tation which  they  must  have  costs.  When  they  come  to  that, 
as  I said  a moment  ago,  they  will  be  satisfied.  That  is  all  they 
want.  They  are  honest;  they  are  willing  to  pay,  as  they  pay 
for  everything  else,  what  they  believe  the  thing  that  they  buy 
is  worth.  And  thus,  when  we  have  that  state  of  mind,  with- 
out which  we  have  unrest,  we  will  peacefully  follow,  with 
interested  view,  the  development  of  the  street  railroads  in  this 
city. 

At  this  juncture,  and  from  now  on,  what  is  the  duty  of 
this  community?  There  is  the  present  grave  problem — what 
is  the  duty  of  this  community?  Some  of  the  most  intelligent 
people  among  us  do  not  seem  to  understand  what  it  is  we  have, 
or  what  it  is  that  is  before  us.  I read,  a day  or  two  ago,  in  a 
financial  paper  published  in  this  city,  that  it  was  not  in  favor 
of  the  “Tayler  plan,”  and  that  the  plan  would  not  succeed, 
because  three-cent  fare  would  not  pay.  Well,  I have  always 
said,  what  I said  a few  minutes  ago,  that  I did  not  know,  and 
no  man  knows,  what  rate  of  fare  will  pay  under  the  conditions 
which  we  now  have.  I certainly  never  stated  that  I was  in 
favor  of  any  particular  rate  of  fare.  At  all  events,  three-cent 
fare,  or  any  other  rate  of  fare,  hasn’t  anything  to  do  with  the 
plan  which  has  had  my  name  prefixed  to  it.  The  same  paper 
said  that  I had  robbed  the  stockholders  of  the  Cleveland  Rail- 
way Company — seeming  to  attach  a moral  quality  to  the  act. 
Now,  I do  not  mention  that  by  way  of  complaint.  I cannot 
make  everybody  understand  the  ordinance.  I only  say  that  it 
behooves  intelligent  people  to  understand  what  this  is  about, 
and,  when  they  proclaim  themselves  as  authorities  on  that 
subject,  to  speak  the  truth  about  it,  so  that  they  may  not  mis- 
lead those  who  may  be  called  upon  to  invest  their  money  in 
this  great  enterprise. 

There  is  a large  duty,  than  which  none  is  higher,  on  the 
managers  of  this  street-railroad  property  during  the  next  few 
years.  They  must  not  content  themselves  with  the  one  thought 
that  they  have  a vested  right,  in  perpetuity,  to  operate  this 

76 


property.  They  must  rise  to  a conception  of  the  fact  that  they 
owe  a duty  to  the  public,  distinguished  from  the  mere  duty  of 
operating  the  property.  They  are  pledged  to  do  justice  to  the 
community ; and  I do  not  question  their  purpose  to  do  so.  But 
it  will  not  be  harmful,  since  I am  covering  the  various  elements 
of  the  community  in  respect  to  the  duty  that  they  owe  at  this 
juncture,  to  make  reference  to  them.  If  those  in  the  immediate 
management  of  the  property  do  not  wisely  or  fairly  or  justly 
manage  it,  having  regard  to  the  public — because  their  interests 
are  absolutely  protected  in  the  property,  and  there  ought  to 
be  no  part  of  this  community  more  earnestly,  or  personally 
selfdenyingly,  submitting  their  case  to  the  arbitrament  of  the 
public  than  those  who  are  in  the  management  of  it,  because 
they  are  under  no  financial  risk  in  doing  it — if  the  management 
will  not  do  it,  then  the  public  spirit  and  public  honesty  of  the 
board  of  directors  ought  to  see  that  it  is  done  that  way;  and 
if  they  won’t  do  it,  then  the  five  or  six  thousand  shareholders 
in  this  community  ought  to  see  that  a board  of  directors  is 
elected  that  will  do  it;  because  not  one  of  them,  from  manager 
down  to  the  humblest  stockholder,  has,  in  truth  or  in  fact,  any 
real  or  different  interest  in  the  solution  of  the  problem  and  the 
working  out  of  the  plan  than  the  poorest  rider  on  the  cars,  who 
has  no  other  interest  in  it  than  to  pay  his  money  and  take  his 
ride. 

And  there  is  a duty  on  the  council  of  the  city,  and  the 
mayor  of  the  city.  They  owe  a duty  to  the  whole  community. 
The  individual  councilman  ought  not  to  conceive  that  he  owes 
a special  duty  to  his  own  particular  constituency,  at  the  expense 
of  the  entire  community.  It  is  undoubtedly  true,  and  all  of  us 
are  so  constituted,  that,  whether  purposely  or  not,  we  want  to 
have  better  service  for  ourselves  than  we  are  entitled  to  have. 
That  may  arise  from  our  voracity,  or  rapacity,  or  may  arise 
from  the  fact  that,  since  we  look  at  the  subject  with  narrow 
and  prejudiced  eyes,  we  may  not  justly  judge  of  what  our 
rights  are  as  related  to  the  rights  of  the  public  at  large  and  the 
entire  community.  The  council  owes  it  to  this  community,  as 
it  does  to  itself,  to  so  patiently  and  conservatively  and  justly 
consider  every  claim  that  is  made  as  to  the  method  of  conduct- 
ing transportation,  as  to  the  routing  of  cars,  as  to  quality  and 
amount  of  service,  as  to  see  that  justice  is  done  to  everybody 
involved.  And  it  is  themselves  only  that  are  interested — they 
and  their  constituents — in  the  kind  of  service  that  is  given. 

And  there  is  a duty  on  the  street-railroad  commissioner. 
He  it  is  who  must  stand  in  the  peculiar  relation  of  adviser  to 
the  council;  and  he  must  stand  in  very  close  physical  and  in- 
tellectual relation  with  the  management  of  the  street  railroad. 
If  the  management,  on  the  one  hand,  and  the  council  and  the 
car-riders  on  the  other  hand,  can  get  into  a state  of  mutual 
friendship  and  harmony,  the  duties  of  the  street-railroad  com- 

77 


missioner  will  be  nominal  only.  But  for  a long  time  the  con- 
dition to  which  I have  just  referred  cannot  come,  and  there- 
fore it  is  that  this  commissioner  will  stand  in  a most  delicate 
relation  toward  the  street-railroad  officials,  and  in  a most  inter- 
esting relation  to  the  mayor  and  the  city  council.  He  must 
deal  with  the  street-railroad  management,  at  the  beginning,  at 
arm’s  length,  because  he  must  be  able  to  judge  for  himself 
what  is  the  right  thing.  He  must  be  able  to  know  what  it  is 
that  is  going  on,  and  he  will  have  to  judge  and  know  by  reason 
of  his  own  independent  efforts,  and  not  by  what  the  manage- 
ment may  tell  him.  He  must  learn  the  facts  for  himself  by 
such  effort,  and  by  such  independent  advice  as  he  can  obtain. 
And  then,  with  his  convictions  bottomed  upon  knowledge,  as 
fully  as  he  is  able  to  acquire  knowledge,  he  must  appear  before 
his  council  and  his  mayor,  and  he  must  tell  them  just  what 
he  believes ; he  must  tell  them  what  he  thinks  is  right.  He 
cannot,  and  I know  that  the  street-railroad  commissioner  who 
has  been  named  will  not,  in  any  sense,  be  a mere  time-server, 
who,  fearful  that  he  may  lose  his  office,  will  not  express  and 
act  upon  his  own  independent  judgment.  It  will  be  for  him, 
among  the  warring  elements  of  various  constituencies  and 
various  members  of  the  council,  to  tell  them  the  truth,  and  to 
tell  it  so  forcibly  and  in  such  certain  language  that,  if  the 
council  overrides  his  judgment,  the  community  will  know  how 
the  council  has  overriden  his  judgment,  and  be  able  to  say 
whether  he  or  the  council  is  right.  For  the  time  being,  upon 
this  commissioner  of  street-railroads,  in  my  judgment,  rests 
the  chief  responsibility  for  the  accomplishment  of  that  suc- 
cess which  ought  to  come. 

And  so  there  is  a duty  upon  the  press,  and  upon  the  public. 
The  public  and  the  press  ought  to  hold  up  the  hands  of  the 
street-railroad  management  when  it  is  doing  right.  They  both 
ought  to  hold  up  the  hands  of  the  council  and  the  street- 
railroad  commissioner  when  they  are  doing  right.  The  press 
ought,  above  all  things,  to  undertake  to  eliminate,  as  a matter 
of  sensational  news,  the  various  actually  colorless  things  that 
happen  in  connection  with  the  street-railroad  business,  and 
ought  to  endeavor  to  create  sound  and  not  excited  public 
sentiment. 

So,  I say,  the  street-railroad  commissioner  should  have 
courage,  industry,  patience  and  tact;  the  public  and  the  press 
should  have  patience  and  sympathy  and  helpfulness ; the  man- 
agement should  be  anxious  and  industrious  to  do  their  public 
duty;  and  if  those  who  are  thus  related  to  this  situation,  which 
in  its  methods  revolutionizes  the  methods  that  have  heretofore 
prevailed — if  they  perform  their  duty — we  shall  permanently 
establish  in  the  popular  mind  the  righteous  principle  upon 
which  the  settlement  rests. 


78 


EXHIBIT  No.  9. 

(From  the  Cleveland  Plain  Dealer  of  May  29th,  1918.) 


EXPRESS  CONCERNS  COMBINE  JULY  1. 

Giant  Company  to  Include  Adams,  American,  Wells- 
Fargo  and  Southern. 

Washington,  May  28,  1918. — One  union  express  com- 
pany for  the  United  States  was  created  today  by  agreement 
between  Director-General  McAdoo  and  the  Adams,  American, 
Wells-Fargo  and  Southern  companies.  The  transportation 
business  of  these  companies  will  be  merged  under  a new  private 
corporation  with  capital  of  more  than  $30,000,000,  to  be  known, 
probably,  as  the  Federal  Express  Co.  George  C.  Taylor,  now 
president  of  the  American  company,  will  be  head  of  the  new 
concern. 

After  July  1,  when  the  combination  becomes  effective, 
shippers  will  direct  shipments  “by  express”  without  regard  to 
company. 

The  company  will  be  the  express  carrying  agency  of  the 
railroads,  operating  privately , but  under  contract  to  turn  over 
$ o %.  per  cent,  of  its  gross  revenues  ( the  combined  gross  was 
more  than  $200,000,000  last  year)  to  the  roads  for  transporta- 
tion. Three  smaller  railroad-owned  companies,  the  Western, 
Great  Northern  and  Northern,  may  join  the  combination  later. 

A pending  application  for  ten  per  cent,  increase  in  rates 
will  be  passed  upon  soon  by  the  interstate  commerce  com- 
mission. 

More  than  100,000  employes  of  the  four  companies  are 
to  be  retained  under  the  new  corporation,  and  their  wages 
will  be  raised  in  many  cases. 

Through  economies  by  common  use  of  wagons,  trucks, 
offices,  railroad  cars,  etc.,  and  simplification  of  accounting,  the 
merged  companies  hope  to  save  many  millions  of  dollars  and 
to  render  better  service. 

Though  the  merger  is  arranged  under  war  exigencies,  it 
is  planned  as  permanent,  and  accomplishes  the  object  which 
has  been  discussed  for  almost  a century  of  competitive  condi- 
tions. Last  year  the  four  leading  companies  barely  made  ex- 
penses, and  the  Adams  recorded  a deficit.  Early  months  this 
year  showed  even  a worse  record. 

Mr.  Taylor’s  choice  as  head  of  the  new  company  is  in 
line  with  his  spectacular  rise  from  his  first  position  as  wagon- 
driver  for  the  American  company  in  a Wisconsin  town.  B.  D. 
Caldwell,  president  of  the  Wells-Fargo,  will  be  chairman  of 
directors  of  the  corporation,  and  W.  M.  Barrett,  president  of 
the  Adams,  will  be  a director. 


79 


Out  of  th  per  cent,  gross  earnings  retained , the 

union  corporation  will  pay  operating  expenses,  taxes  and  divi- 
dends of  5 per  cent,  on  its  capital  stock.  Out  of  the  next  2 
per  cent,  available  for  distribution , the  company  zvill  receive 
1 per  cent,  and  the  government  1 per  cent.  Out  of  the  next 
3 per  cent,  the  company  will  get  1 per  cent,  and  the  govern- 
ment 2 per  cent.  One-fourth  of  amounts  above  this  will  be 
distributed  to  the  company  and  three-fourths  to  the  govern- 
ment. 


EXHIBIT  No.  10. 

THE  CITIZENS  SAVINGS  AND  TRUST  CO. 

April  14th,  1918. 

The  Honorable  Harry  L.  Davis,  Mayor,  and  the  City  Council 

of  the  City  of  Cleveland. 

Gentlemen: 

Recent  litigation  between  the  city  of  Cleveland  and  the 
Cleveland  Railway  Company  over  advance  in  the  rate  of  fare 
has  drawn  attention  to  the  relations  between  the  city  and  the 
railway  company  and  to  the  stock  of  the  railway  company  as 
an  investment. 

When  the  street  railway  controversy  was  on,  which  re- 
sulted in  the  settlement  through  the  Tayler  franchise,  it  was 
thoroughly  understood  that  the  compromise  which  resulted 
was  a compromise  which  would  give  to  the  Cleveland  public 
the  lowest  rate  of  fare  consistent  with  a reasonable  investment 
for  the  stockholders  and  security  in  such  investment. 

At  that  time  it  was  felt  that  six  per  cent,  was  a fair  com- 
pensation to  be  paid  for  money  invested  and  that  the  provisions 
of  the  ordinance  would  insure  an  interest  return  of  that  amount 
upon  all  stock  of  the  company. 

The  capital  stock  of  the  company  at  that  time,  as  we  recall 
it,  was  between  fourteen  and  fifteen  million  dollars.  With  the 
stock  that  is  now  offered  to  the  public  the  amount  of  money 
invested  in  stock  of  the  street  railway  company  has  practically 
been  doubled,  and  the  number  of  stockholders  very  largely 
citizens  of  Cleveland  and  vicinity,  has  more  than  been  doubled. 

The  savings  banks  and  trust  companies  have  been  invest- 
ing trust  funds  in  the  stock,  and  have  been  advising  their 
clients  to  invest  in  the  stock,  for  two  reasons : 

First:  Because  they  considered  the  investment  a con- 

servative and  sure  investment  to  advise  their  clients  to  make. 

Second:  Because  they  realized  that  Cleveland  is  a grow- 
ing city  and  must  need  enlarged  railway  facilities  constantly, 
and  that  the  money  for  such  extensions  and  additions  as  the 
city’s  necessities  shall  require,  should  largely  come  from  the 

80 


permanent  investor,  all  speculation  in  the  stock  having,  by  the 
ordinance,  been  eliminated. 

No  one,  at  the  time  the  ordinance  went  into  effect,  fore- 
saw the  great  change  in  the  industrial  and  financial  affairs  of 
the  country  that  the  European  war  has  brought  about. 

Money  at  the  present  time  is  worth  much  more  than  it 
was  in  1909  and  commands  a much  higher  price  in  the  market. 

Labor  has  very  largely  increased  in  cost,  and  is  demand- 
ing still  further  increase.  Materials  and  supplies  have  also 
very  largely  increased  in  cost. 

We  understand  that  not  only  is  the  interest  fund  of  the 
street  railway  company  below  three  hundred  thousand  dollars, 
but  also  other  funds  have  been  depleted  since  the  ordinance 
went  into  effect,  so  that  there  is  now  something  like  two  mil- 
lion of  dollars  to  be  made  up. 

Although  these  differences  always  have  been  adjusted 
in  a satisfactory  manner  between  the  railway  company  and  the 
city,  the  question  that  we  see  now  immediately  before  us  is, 
that  with  the  great  increase  in  price  of  material  and  labor, 
which  has  already  come,  together  with  the  increased  prices  that 
we  are  likely  to  face,  whether  we  can  safely  continue  to  advise 
our  clientele  to  continue  purchasing  the  stock  of  the  street 
railway  company  at  par. 

It  is  manifest  to  us  that  in  order  for  the  company  to  con- 
tinue the  paying  of  six  per  cent,  interest,  it  must  be  permitted 
to  increase  its  rate  of  fare  beyond  the  maximum  provided  in 
the  ordinance. 

The  city  of  Cleveland  is  a great  commercial  city.  It  is 
straining,  and  should  strain,  every  nerve  to  aid  the  govern- 
ment at  this  time;  many  of  its  factories  are  being  required  to 
enlarge  by  reason  of  the  demands  made,  either  directly  by  the 
government  or  in  its  interests,  and  the  laboring  people  must  be 
transported  promptly  to  and  from  their  work  in  order  for  the 
community  to  give  its  greatest  efficiency. 

The  city  has  absolute  control  of  all  extensions  and  better- 
ments of  the  service,  and  unquestionably  certain  extensions 
and  betterments  will  be  required  in  the  near  future,  which 
may  not  pay  operating  expenses  for  some  time  to  come. 

We  are  sending  a copy  of  this  letter  also  to  The  Cleveland 
Railway  Company,  with  the  request  that,  for  the  benefit  of 
ourselves  and  our  clientele  as  well  as  all  stockholders  and  pro- 
posed stockholders  of  the  street  railway  company,  we  receive 
a reply  from  the  city  of  Cleveland  and  from  the  street  railway 
company,  whether,  whenever  the  necessity  arises,  they  will 
both  unite  in  providing  for  and  consenting  to  such  an  increased 
rate  of  fare  as  shall  simply  be  sufficient  to  guarantee  to  the 
stockholder  his  regular  six  per  cent,  interest.  If  we  are  as- 
sured that  can  be  done,  we  should  feel  warranted  to  use  our 
influence  in  urging  the  citizens  of  Cleveland  and  others  to 

81 


continue  their  purchases  of  stock,  even  though  it  would  give 
them  a less  return  than  investments  in  other  securities  might 
afford. 

We  understand  there  is  about  million  dollars  of  the  pres- 
ent offering  of  stock,  the  proceeds  to  be  derived  from  the  sale 
thereof  which  are  needed  to  liquidate  its  indebtedness  and 
make  improvements  required  from  time  to  time  by  the  city, 
still  unsold. 

This  is  a matter  of  vital  importance  to  the  city  of  Cleve- 
land. We  think  that  all  of  the  stockholders  of  The  Cleveland 
Railway  Company  are  entitled  to  know  where  they  stand,  and 
we  ask  the  city  of  Cleveland,  through  its  mayor  and  council, 
and  The  Cleveland  Railway  Company,  through  its  proper 
officers,  to  give  us  their  views  and  assurances  upon  this  sub- 
ject. 

Mr.  F.  H.  Goff,  president  of  The  Cleveland  Trust  Com- 
pany y took  an  active  part  in  the  negotiations  at  the  time  of  the 
settlement  made  by  Mayor  Johnson  and  Judge  Tayler,  and  is 
familiar  with  the  thought  and  intention  of  all  those  participat- 
ing in  the  settlement.  I therefore  submitted  this  letter  to  Mr. 
Goff  before  sending  it  to  you,  and  I herewith  attach  a copy 
of  his  reply. 

Yours  very  respectfully, 

J.  R.  NUTT, 

President. 

EXHIBIT  No.  11. 

Cleveland,  O.,  April  15th,  1918. 

Mr.  J.  R.  Nutt, 

President,  The  Citizens  Savings  & Trust  Co., 

Cleveland,  Ohio. 

Dear  Mr.  Nutt: 

I heartily  concur  in  the  suggestion  contained  in  your  letter 
to  Mayor  Davis  and  the  city  council  that  prompt  consideration 
be  given  the  suggestion  of  increasing  the  maximum  rate  of 
fare  under  the  Tayler  grant. 

A*  world  wide  war  was  not  conceived  of  at  the  time  the 
ordinance  was  passed.  Increased  cost  of  operation,  entirely 
due  to  war  conditions,  which  is  threatening  the  ruin  of  many 
public  utility  companies  and  will  inevitably  compel  some  of 
them  to  seek  refuge  in  the  courts  unless  an  increase  in  rates 
is  speedily  granted,  has  already  impaired  the  ability  of  The 
Cleveland  Railway  Company  to  obtain  through  the  sale  of 
stock  funds  required  for  additions  and  extensions. 

The  principle  underlying  the  Tayler  grant  requires  serv- 
ice of  a character  the  public,  through  their  representatives 

82 


in  the  city  council,  demand  at  actual  cost  plus  a return  of 
six  per  cent,  on  capital  invested.  The  grant  will  fail  when- 
ever there  is  a failure  to  protect  either  the  traveling-  public 
or  the  company’s  stockholders.  Service  at  cost  is  all  the 
public  is  entitled  to,  and  six  per  cent  on  capital  actually  in- 
vested is  all  the  stockholders  are  entitled  to. 

The  public  in  a sense  are  partners  in  the  enterprise. 
They  are  interested  in  the  price  paid  for  fuel,  labor  and  ma- 
terial, and  in  just  the  same  way  are  interested  in  the  price 
paid  for  money  which  depends  upon  the  supply  and  char- 
acter of  security  offered.  To  a very  great  extent,  the  secur- 
ity given  investors  in  the  stock  of  the  Cleveland  railway 
is  dependent  upon  the  maximum  rate  of  fare  the  company 
is  permitted  to  charge.  To  enable  the  company  to  finance 
its  requirements  by  the  sale  of  stock  on  favorable  terms,  the 
franchise  must  permit  of  sufficient  earnings  to  insure  the 
payment  of  a six  per  cent  dividend  at  all  times.  That  inves- 
tors are  beginning  to  regard  this  as  doubtful,  with  the  maxi- 
mum rate  of  fare  now  prescribed,  is  indicated  by  the  reduced 
price  the  stock  has  commanded  in  the  past  few  weeks. 

I believe  those  still  living  who  participated  in  the  settle- 
ment made  by  Mayor  Johnson  and  Judge  Tayler  will  concur 
in  the  opinion  I have  expressed  and  am  confident  that  Mayor 
Johnson,  if  living,  would  join  in  urging  that  the  matter  be 
given  prompt  and  careful  consideration. 

Yours  very  truly, 

F.  H.  GOFF. 


EXHIBIT  No.  12. 

THE  GUARDIAN  SAVINGS  AND  TRUST  CO. 

Cleveland,  Ohio,  April  23,  1918. 

Mr.  John  J.  Stanley,  President, 

Cleveland  Railway  Company, 

Leader-News  Building, 

Cleveland,  Ohio. 

My  Dear  Mr.  Stanley : 

As  you  doubtless  know,  we  have,  from  time  to  time  in 
the  past,  invested  the  Trust  Funds  of  this  company  in  the 
stock  of  The  Cleveland  Railway  Company,  and  have,  on 
numerous  other  occasions,  recommended  it  as  a desirable  in- 
vestment for  trust  funds,  believing  that  the  Tayler  Fran- 
chise fully  protected  the  investor. 

In  making  the  investments  and  recommending  the 
stock  as  we  did,  we  could  not,  of  course,  foresee  the  unusual 
conditions  prevailing  at  the  present  time  in  connection  with 

83 


the  operation  of  a street  railway  such  as  the  Cleveland 
railway. 

In  order  to  protect  the  investment  of  these  funds,  we 
urge  you  to  use  every  possible  endeavor  and  influence  with 
the  city  of  Cleveland  to  allow  the  company  to  raise  its  fare 
above  the  maximum  amount  provided  for  by  the  franchise 
to  an  amount  which  will  permit  the  company  to  pay  all 
legitimate  expenses  and  6%  dividend  upon  its  stock,  it  doubt- 
less being  the  intention  of  the  franchise,  at  the  time  it  was 
granted,  to  guarantee  to  the  investor  in  the  stock  of  The 
Cleveland  Railway  Company  a return  of  6%  upon  his 
money. 

As  a further  evidence  of  the  statement  contained  in  the 
latter  part  of  the  foregoing  paragraph  we  have  only  to  refer 
you  to  the  record  of  stockholders  to  see  how  widely  held 
the  stock  is,  much  of  it  being  in  small  amounts,  indicating 
that  the  wage  earner  and  the  man  of  small  means  had  the 
same  viewpoint  as  above  expressed  in  connection  with  the 
investment  of  his  earnings  in  the  stock  of  The  Cleveland 
Railway  Company. 

Very  truly  yours, 

J.  A.  HOUSE, 

President. 


EXHIBIT  No.  13. 

(From  the  Cleveland  Plain  Dealer  of  June  5,  1918) 

“Probate  Judge  Hadden,  who  for  eight  years  has  been 
advising  guardians  and  trustees  to  invest  trust  funds  in 
Cleveland  Railway  Company  stock,  expressed  dismay  yes- 
terday when  told  that  Mayor  Davis  had  suggested  to  coun- 
cil that  dividends  to  stockholders  of  the  street  car  company 
be  cut  from  six  to  four  per  cent.  Judge  Hadden  declared  he 
had  approved  the  investment  of  trust  funds  in  street  car 
company  stock,  because  of  the  city  guarantee  that  six  per 
cent  dividends  would  be  paid  regularly,  and  the  stock  was 
‘tax  free.’  He  would  make  no  estimate  of  the  number  of 
wards,  widows  and  orphans  whose  funds  had  been  invested 
in  the  stock  with  his  approval.” 


84 


EXHIBIT  No.  14. 

THE  BOSTON  ELEVATED  RAILWAY  COMPANY. 


Boston,  Mass.,  April  8,  1918. 

Mr.  H.  J.  Davies,  Treasurer, 

The  Cleveland  Railway  Company, 

Cleveland,  Ohio. 

Dear  Mr.  Davies : 

Replying  to  your  inquiry  of  the  4th  relative  to  our  stock 
issues,  beg  to  say  that  for  the  first  $10,000,000  worth  of  stock 
the  company  received  par.  As  a matter  of  fact,  however, 
the  subscribers  of  this  stock  paid  $104.25  for  it,  and  the 
$4.25  went  to  the  owners  of  the  franchise  of  the  Boston 
Elevated  Railway  Company,  to  cover  expenditures  which 
they  had  made. 

For  the  next  $3,300,000  the  Company  received  $155  per 
share,  this  being  the  price  put  upon  it  by  the  Railroad  Com- 
missioners of  the  state,  as  the  laws  which  were  then  in  effect 
provided  that  they  should  set  a price  at  which  any  new  cap- 
ital might  be  issued. 

The  next  $6,650,000  was  put  out  at  the  price  of  $110 
per  share,  the  law  in  the  meantime  having  been  changed  and 
permitting  the  stockholders  to  name  the  price  at  which  new 
shares  should  be  issued,  with  the  proviso  that  the  price  must 
be  approved  by  the  state  commissioners.  All  of  this  stock 
but  1,501  shares  was  taken  by  subscription,  and  these  1,501 
shares  were  sold  at  public  auction,  to  conform  to  the  then 
existing  laws,  and  these  shares  brought  an  average  of 
$130,625. 

The  next  issue  authorized  was  one  of  $4,000,000,  and 
this  was  under  the  same  conditions  as  the  preceding  issue, 
and  was  sold  at  $105  per  share.  All  of  this  stock  with  the 
exception  of  706  shares  was  subscribed  for,  and  these  706 
shares  have  not  as  yet  been  disposed  of,  as,  while  the  law 
provides  that  any  unsubscribed  stock  shall  be  sold  at  public 
auction,  the  laws  of  this  state,  as  perhaps  you  know,  do  not 
permit  any  company  incorporated  in  this  state  to  dispose  of 
any  stock  at  less  than  par,  and  we  could  not  get  par  for  it. 
Our  stock  is  selling  today  at  $59,  and  a few  months  ago  was 
as  low  as  $27. 

The  capital  now  outstanding  is  $23,879,400,  and  the 
premium  which  has  been  realized  on  it  amounts  to  $2,707,- 
428.13. 

You  no  doubt  are  aware  that  there  is  now  being  strong- 
ly agitated  here  a change  in  the  law  to  provide  for  street 
railways  in  the  state  a so-called  “Service  at  Cost”  scheme. 
This  bill,  however,  is  still  in  committee  and  probably  will  be 

85 


reported  out  some  time  this  week.  There  is,  in  addition  to 
the  general  law  applying  to  all  street  railways,  a special 
provision  which  will  apply  to  us  that  provides  for  a Board 
of  Trustees  to  control  the  property, — this  Board  to  be  ap- 
pointed probably  by  the  Governor  and  none  of  them  to  be 
stockholders.  If  this  goes  through,  this  Company  will  ap- 
parently be  operated  under  different  conditions  than  have 
ever  existed  so  far  as  I know  with  any  public  service  cor- 
poration. 

With  kindest  regards,  I remain, 

Yours  very  truly, 

H.  L.  WILSON,  Treasurer. 

EXHIBIT  No.  15. 

June  4,  1918. 

Honorable  Council  of  the  City  of  Cleveland, 

City  Hall,  City. 

Gentlemen : 

Any  award  of  the  United  States  War  Labor  Board  al- 
lowing a substantial  increase  in  the  wages  of  the  employes 
of  the  Cleveland  Railway  Company  will  necessitate  imme- 
diate consideration  of  the  rate  of  fare.  Since  the  war,  the 
Cleveland  Railway  Company  has  been  experiencing  abnor- 
mal operating  conditions.  The  number  of  car  riders  has 
steadily  decreased,  while  the  cost  of  all  labor  and  material 
required  by  the  company  has  steadily  increased.  Similar 
conditions  prevail  in  practically  all  other  street  railway  lines 
throughout  the  country.  A large  portion  of  the  Cleveland 
Railway  Company’s  increased  expense  is  due  to  the  higher 
wages  paid  to  its  men,  which  will  have  to  be  further  ad- 
vanced, in  all  probability,  by  the  findings  of  the  government 
board. 

If  higher  wages  are  to  be  paid  the  men,  the  company 
will  undoubtedly  ask  for  a change  in  the  rate  of  fare  in  order 
to  meet  its  added  financial  burdens.  This  request,  if  made, 
and  the  facts  connected  with  it  should  have  the  careful  con- 
sideration of  every  citizen  in  Cleveland.  It  means,  if 
granted,  that  the  Tayler  franchise  will  have  to  be  modified 
so  as  to  permit,  at  least  temporarily,  a rate  of  fare  in  excess 
of  the  maximum  stated  in  the  ordinance. 

When  the  Tayler  franchise  was  written,  neither  the  city 
or  the  company  could  foresee  a condition  so  abnormal  as  to 
require  a higher  rate  of  fare  than  the  maximum  in  order  to 
sustain  a 6%  dividend  on  the  company’s  stock.  For  this 
reason  there  was  no  provision  made  in  it  to  cover  condi- 
tions as  they  now  exist. 


86 


The  company  has  enjoyed  unusual  financial  success 
since  the  Tayler  grant  went  into  effect.  Its  stock  has  al- 
most invariably  sold  above  par,  while  that  of  other  street 
railway  systems  has  sold  far  below,  and  notwithstanding  the 
fluctuation  of  various  other  industrial  stocks,  the  dividends 
of  the  company  have  always  been  paid.  There  has  been  an 
entire  absence  of  serious  friction  between  the  company  and 
its  employes  and  the  public,  and  generally  the  present  agree- 
ment has  resulted  in  mutual  advantage. 

In  my  judgment,  the  present  situation  calls  for  mutual 
concessions.  The  city  has  done  all  in  its  power  to  furnish 
unimpaired  dividends  for  the  company.  It  is  therefore  my 
recommendation  that  before  proceeding  with  any  definite 
negotiations  with  the  company  looking  toward  a change  in 
the  rate  of  fare,  the  Cleveland  Railway  Company  should  be 
requested  to  furnish  your  body  with  a formal  statement  as 
to  its  attitude  with  reference  to  the  following  propositions : 

(1)  By  way  of  assuming  a portion  of  the  increased 
cost  of  operation,  will  the  stockholders  of  the  Cleveland 
Railway  Company  agree  to  a reduction  of  stock  dividends 
to  4%  per  annum  during  the  continuation  of  the  war,  or 
until  a return  to  normal  cost  of  operation? 

(2)  Will  the  company  co-operate  with  the  city  in  se- 
curing federal  action  to  differentiate  opening  and  closing 
hours  of  employment  so  as  to  more  evenly  distribute  the 
traffic  during  the  day  and  eliminate  congestion  during  the 
so-called  “rush  hours?”  This  more  even  distribution  of 
traffic,  if  carried  out,  would  not  only  save  to  the  car  riders 
of  Cleveland  a very  large  sum  of  money  per  year  in  expense 
of  operation,  but  would  also  eliminate  the  present  difficulties 
between  the  company  and  its  men  as  to  working  hours  and 
conditions. 

(3)  Will  the  company  agree  to  restrict  its  extensions 
and  improvements,  both  capital  expense  and  renewals,  ex- 
cept when  absolutely  necessary,  in  conformity  with  the 
policy  adopted  by  the  United  States  government  in  the  oper- 
ation of  steam  railroads ; in  other  words,  will  the  company 
agree  to  put  forth  every  effort  in  order  to  make  its  present 
equipment  suffice  during  the  period  of  the  war? 

(4)  Will  the  company  agree  to  postpone,  during  the 
period  of  the  war,  the  charging  off  of  the  present  suspense 
accounts?  These  accounts  which  by  previous  action  of  the 
council,  are  now  payable  to  the  company  at  the  rate  of  about 
$110,000  a month,  represent  accumulated  over-expenditures 
in  operating  and  maintenance  funds  and  payment  for  retire- 
ment of  obsolete  material  for  a period  of  eight  years.  This 
postponement,  if  agreed  to,  would  result  in  effecting  an  im- 
mediate reduction  in  the  company’s  expenditures  of  ap- 
proximately $810,000. 

The  above  in  my  opinion  are  the  four  major  methods 
87 


of  economy  which  if  put  into  effect  by  the  company  might 
reasonably  be  expected  to  obviate  any  present  raise  in  the 
rate  of  fare. 

The  Tayler  grant  was  written  and  adopted  in  the  spirit 
of  justice  and  co-operation  and  should  be  interpreted  and 
followed  in  the  same  way.  I do  not  believe  it  is  quite  fair 
in  these  times  that  the  public  should  be  called  upon  to  bear 
the  entire  burden  of  the  company’s  increased  cost  of  oper- 
ation. Both  the  city  and  the  company  have  this  present 
opportunity  to  manifest  the  proper  spirit  and  it  is  with  this 
thought  in  mind  that  I make  this  request  of  the  council  that 
it  present  the  above  suggestions  to  the  company  for  its  care- 
ful consideration.  Very  truly  yours, 

HARRY  L.  DAVIS, 

Mayor. 


EXHIBIT  No.  16 

THE  CLEVELAND  RAILWAY  COMPANY. 

June  10,  1918. 

Council  of  the  City  of  Cleveland, 

Cleveland,  Ohio. 

Gentlemen : 

Mayor  Davis  has  addressed  a letter  to  you  under  date 
of  June  4th  on  the  subject  of  the  award  to  be  made  by  the 
United  States  War  Labor  Board  on  the  demand  of  our  train- 
men for  an  increase  in  wages.  I write  this  in  order  that  you 
may  have  before  you  at  the  same  time  that  you  consider  his 
letter  my  answer  to  his  questions  and  suggestions. 

We  have  argued  to  the  war  labor  board  against  a sub- 
stantial increase  in  the  wages  of  our  employes  on  two  prin- 
cipal grounds,  first,  that  the  increase  demanded  is  a larger 
percentage  or  ratio  of  increase  than  the  increase  claimed  by 
the  men  in  the  cost  of  living,  on  which  increase  they  based 
their  demand,  and  secondly,  that  we  shall  be  unable  to  fur- 
nish to  this  community  the  service  we  are  now  furnishing 
at  the  present  rate  of  fare  if  any  substantial  increase  in 
wages  is  awarded. 

The  mayor  states  that  “a  substantial  increase  in  the 
wages  of  the  employes  of  the  Cleveland  Railway  Company 
will  necessitate  immediate  consideration  of  the  rate  of  fare.” 
It  is  true  that  such  an  award  will  necessitate  either  an  in- 
crease in  the  rate  of  fare  or  a very  substantial  decrease  in 
service.  You  have  entire  control  of  the  service.  But  if 
any  resolution  or  ordinance  of  yours  regulating  service  ren- 
ders it  impossible  for  the  company  to  earn  money  enough 
at  the  maximum  rate  of  fare  to  pay  the  taxes  and  interest 

88 


provided  for  by  Sections  16  and  18  of  the  franchise,  the  com- 
pany may  object  to  rendering  the  service,  and  if  the  city 
insists  upon  the  service,  may  require  that  the  question  be 
submitted  to  arbitration;  “and  if  the  board  of  arbitration 
decide  that  such  service  will  not  produce  the  moneys  needed 
as  aforesaid  then  the  resolution  or  ordinance  shall  not  be 
further  complied  with  by  the  company  and  the  company 
shall  have  the  right  to  recoup  any  losses  sustained.”  Of 
course,  neither  you  nor  I can  tell  until  the  war  labor  board 
makes  its  decision  what  increase  in  rate  of  fare  or  what  de- 
crease in  service  will  be  necessary  in  order  to  enable  us  to 
pay  the  predicted  increase  in  wages.  I had  not  expected,  by 
asking  your  consent  to  raise  the  rate  of  fare,  to  anticipate 
your  right  to  try  to  save  the  present  rate  of  fare  by  cutting 
the  service.  It  may  be  that  you  will  reduce  the  service  to 
such  an  extent  as  to  enable  us  to  pay  an  increase  in  wages. 
A substantial  increase  in  wages  will  necessitate  a corre- 
spondingly substantial  decrease  in  service.  This  is  a matter 
that  you  may  well  consider  in  advance  of  any  application 
by  us  for  an  amendment  of  the  franchise  in  respect  to  fares. 

It  is  true,  as  the  mayor  states,  that  since  the  war  the  com- 
pany has  experienced  abnormal  operating  conditions  and  that 
the  cost  to  it  of  labor  and  materials  has  steadily  increased — 
conditions  that,  as  he  says,  neither  the  city  nor  the  com- 
pany could  foresee  when  the  Tayler  franchise  was  written. 
He  admits  that  no  provision  was  made  in  the  franchise  to 
meet  these  abnormal  conditions.  There  are  two  ways  of 
meeting  them.  They  may  be  met  by  increasing  the  fare. 
They  may  be  met  by  curtailing  the  service.  If  you  do  not 
care  to  meet  them  by  exercising  your  reserved  and  unques- 
tioned right  to  modify  the  service,  we  shall  be  glad  to  dis- 
cuss with  you  the  question  of  increasing  the  rate  of  fare  as 
soon  as  we  know  what  the  increase  in  wages  is  to  be. 

The  mayor  says  that  the  number  of  car  riders  has  stead- 
ily increased  since  the  beginning  of  the  war,  intending,  I 
presume,  to  have  you  infer  that  this  increase  has  helped  us 
to  operate  our  railroad  at  the  rates  of  fare  that  have  been 
in  effect  since  the  war  started  and  that  the  increase  will  con- 
tinue and  perhaps  make  unnecessary  any  substantial  change 
in  fare  or  service.  But  the  number  of  car  riders  is  now  de- 
creasing. There  was  a decrease  in  April ; there  will  be  a 
larger  decrease  in  May. 

Because  the  company’s  stock  has  “almost  invariably” 
sold  above  par  in  small  lots  he  says  that  the  company  has 
enjoyed  unusual  financial  success  since  the  Tayler  grant 
went  into  effect.  He  says  also  that  the  company  has  always 
paid  interest  upon  its  stock  “notwithstanding  the  fluctua- 
tions of  various  other  industrial  stocks.”  I do  not  know 
why  fluctuations  in  the  market  value  of  industrial  stocks 
should  affect  the  market  value  of  the  stock  of  the  Cleveland 


89 


Railway  Company.  The  railway  company  has  no  war  con- 
tracts, as  many  industrial  corporations  have,  that  should 
make  its  stock  fluctuate  in  value.  It  was  one  of  the  pur- 
poses of  the  framers  of  the  franchise  to  prevent  fluctuations 
in  the  value  of  the  company’s  securities  and  speculation  in 
them.  It  was  said  that  the  price  would  probably  never  go 
below  par  because  it  would  probably  always  be  possible  to 
obtain  money  for  additions  to  our  property  at  a rate  of  in- 
terest not  in  excess  of  six  per  cent.,  and  that  it  would  not  go 
very  far  above  par  because  of  the  city’s  option  to  pur- 
chase it  at  one  hundred  and  ten.  It  was  clearly  seen  then  by 
all  concerned  that  the  stock  ought  to  be  so  protected  in  the 
franchise  that  its  value  would  never  be  less  than  par ; that, 
unless  the  provisions  of  the  franchise  should  be  such  as  to 
make  it  possible  for  the  company  to  obtain  money  at  six  per 
cent,  or  a lower  rate,  needed  extensions  could  not  be  built 
and  additional  rolling  stock  could  not  be  purchased  to  sup- 
ply the  transportation  needs  of  the  city.  It  will  be  a great 
mistake  on  the  part  of  the  city  to  make  it  impossible  or  even 
difficult  for  the  company  to  raise  money  for  additions  and 
betterments. 

The  mayor  speaks  of  the  harmony  that  has  existed  be- 
tween the  company  and  its  employes  and  between  the  com- 
pany and  the  public.  I agree  with  him  that  this  harmony 
or  absence  of  friction  has  resulted  in  mutual  advantages. 

I now  come  to  his  questions  and  his  recommendation 
that  the  company  furnish  you  with  a formal  statement  as  to 
its  attitude  with  reference  to  them. 

1.  He  first  asks  whether,  by  way  of  assuming  a portion 
of  the  increased  cost  of  operation  that  he  assumes  is  to  come 
from  the  award  of  the  war  labor  board,  the  stockholders  of 
the  company  will  agree  to  a reduction  of  the  interest  on 
their  stock  to  four  per  cent,  per  annum.  I have  no  right  to 
reduce  the  rate  of  interest.  Neither  has  the  board  of  direc- 
tors of  the  company.  No  more  right  than  you  have  to  re- 
duce the  rate  of  interest  on  the  city’s  bonds  in  order  to  meet 
operating  deficits.  At  the  time  the  capitalization  of  the 
company  was  fixed  for  the  purposes  of  this  franchise  the 
representatives  of  the  company  argued  that  six  per  cent,  on 
investment  was  as  low  a rate  of  return  as  should  be  paid  to 
the  stockholders.  Mayor  Johnson  and  Mr.  Goff,  as  well  as 
Judge  Tayler,  capitalized  the  property  of  the  Cleveland 
Electric  Railway  Company  at  its  depreciated  value,  which, 
as  disclosed  by  the  Tayler  franchise,  was  seventy  per  cent, 
of  its  cost  or  reproduction  value.  So  that  as  to  that  property 
the  stockholders  are  now  receiving,  not  six  per  cent  on  their 
investment,  but  six  per  cent  on  seventy  per  cent  of  the  in- 
vestment, or  a small  fraction  more  than  four  per  cent.  It  is 
true  that  the  valuation  of  the  property  of  the  Forest  City 
Railway  Company  was  par  of  that  company’s  outstanding 

90 


stock.  But  this  property  was  a small  part  of  the  entire 
street  railway  property  of  the  city  and  its  valuation  at  par 
would  not  materially  raise  the  seventy  per  cent,  valuation 
of  the  Cleveland  Electric  property.  Further,  the  stock- 
holders of  the  Cleveland  Electric  Railway  Company  at  the 
time  of  the  settlement  with  the  city  surrendered  forty-five 
per  cent,  of  their  capital  stock.  Six  per  cent  on 

the  fifty-five  per  cent,  that  they  were  permitted  to 
retain  in  the  settlement  is  but  three  and  three-tenths  per 
cent,  of  the  par  value  of  the  stock  that  they  held  before  the 
compromise.  The  return  that  the  stockholders  receive  on 
their  actual  investment  is  so  low  that  I cannot  ask  them 
to  surrender  any  part.  It  was  the  purpose  of  the  Tayler 
franchise,  several  times  declared  in  it,  to  secure  to  the  inves- 
tors in  the  property  of  the  company  a fair  return,  but  no 
more,  upon  their  investment.  It  was  agreed  /that  sijx 
per  cent,  was  a sufficiently  low  return.  Section  18  of  the 
franchise  says  “that  all  the  payments  provided  to  be  made 
by  Section  16,”  namely,  taxes  and  interest,  “shall  be  first 
paid  out  of  the  interest  fund  without  any  deduction  whatever  ” 
This  was  a promise  on  the  part  of  the  city  to  the  investors 
in  the  company’s  property  and  stock.  On  that  promise  we 
have  been  able  to  raise  all  the  money  that  we  have  needed 
to  meet  the  city’s  demands  for  extensions  and  improve- 
ments. On  the  strength  of  that  promise  and  the  other 
assurances  of  the  franchise  we  have,  since  the  end  of  March, 
received  subscriptions  for  more  than  $1,700,000  of  our  capi- 
tal stock  at  par — enough  to  pay  for  all  the  new  cars,  motors, 
extensions  of  track  and  other  additions  to  property  that  you 
may  demand  or  permit  in  1918  and  probably  in  1919.  Good 
faith  requires  that  we  pay  six  per  cent,  upon  this  new  capi- 
tal. From  the  time  the  Tayler  ordinance  went  into  effect  to 
April  1st  of  this  year  we  sold  capital  stock  at  par  or  better 
to  the  amount  of  $13,000,000.  Part  of  the  proceeds  of  the 
sale  of  this  stock  was  used  to  reduce  our  bonded  debt  from 
$10,000,000  to  $5,495,000.  The  remainder  has  been  expended 
for  “extensions,  betterments  and  permanent  improvements,” 
to  use  the  language  of  the  franchise.  More  than  $8,000,000 
of  it  was  spent  for  improvements  made  at  the  council’s  sug- 
gestion and  on  its  initiative.  On  this  stock  the  company  is 
equally  obligated  to  pay  the  promised  rate  of  interest.  And 
the  city,  having  itself  proposed  most  of  the  expenditures, 
will  surely  not  attempt  to  evade  the  obligation  it  assumed 
in  the  Tayler  franchise,  to  permit — indeed,  to  require — the 
payment  of  six  per  cent,  interest  upon  money  invested  at 
its  direct  request. 

The  franchise  provides  for  a fair  return,  and  no  more , 
upon  investment.  If  six  per  cent,  ever  comes  to  be  more 
than  a fair  return — by  reason  of  low  market  rates  of  interest 
generally,  or  for  any  other  reason — the  city  may  take  steps 

91 


to  bring  about  a reduction,  by  the  method  prescribed  in  Sec- 
tion 33,  viz.,  by  ordering  the  property  transferred  to  a li- 
censee willing  to  accept  a lower  return  than  the  company 
is  then  willing  to  accept.  Of  course,  this  right  will  be  exer- 
cised only  when  the  market  rate  of  interest  is  considerably 
lower  than  six  per  cent.  The  city  has  the  right,  too,  to  pur- 
chase the  property  at  any  time.  A good  time  to  buy  will  be 
when  funds  for  the  purpose  can  be  obtained  by  the  city  at 
low  rates  of  interest.  So,  if  six  per  cent,  ever  comes  to  be 
less  than  a fair  return,  it  will  not  be  unreasonable  for  us 
to  ask  that  the  promise  of  a fair  return  be  kept,  in  order 
that  the  value  of  the  stock  may  be  maintained  at  par,  and 
that  any  additional  money  that  may  be  needed  may  be  ob- 
tained. 

Mayor  Johnson  and  others  representing  the  city  in  the  ne- 
gotiations of  1907,  1908  and  1909  urged,  in  the  interest  of  the 
city  and  the  car  riders,  that  the  stock  ought  to  be  widely  dis- 
tributed among  the  citizens  of  Cleveland.  The  stock  of  the 
Cleveland  Electric  Railway  Company  at  that  time  was 
owned  by  about  eight  hundred  people ; our  stockholders  now 
are  nearly  five  thousand  in  number.  Many  of  them  are  de- 
pendent— to  some  extent,  at  least — for  their  living  expenses 
upon  the  six  per  cent,  interest  they  receive  on  the  stock. 
Many  have  borrowed  money  on  their  stock  to  pay  for  it  or 
to  pay  expenses.  A lowering  of  the  interest  rate  would  les- 
sen the  value  of  the  stock  as  collateral,  and  bring  great  hard- 
ship to  small  holders  if  their  creditors  should  sell  the  stock 
to  enforce  the  payment  of  the  debts  secured  by  its  pledge. 
It  is  as  important  that  the  value  of  the  stock  be  maintained 
at  par  or  better  as  that  the  interest  be  promptly  paid.  Thou- 
sands early  invested  in  the  stock  because  of  the  assurance 
of  the  representatives  of  the  city  that  the  investment  would 
be  safe  and  the  six  per  cent,  return  on  the  stock  certain. 
Since  that  time  others  have  invested,  and  old  stockholders 
have  increased  their  holdings,  upon  their  faith  in  these 
assurances  of  the  safety  of  their  investment,  and  six  per 
cent,  interest  upon  it. 

Savings  banks  have  invested  in  the  stock,  and  have  also 
put  into  it  funds  held  by  them  in  trust  for  others.  This  was 
stated  to  you  and  the  mayor  by  Mr.  J.  R.  Nutt,  president  of 
The  Citizens  Savings  and  Trust  Company,  in  a letter  under 
date  of  April  14th.  I quote  a paragraph  from  that  letter : 

“The  savings  banks  and  trust  companies  have  been  in- 
vesting trust  funds  in  the  stock,  and  have  been  advising  their 
clients  to  invest  in  the  stock,  for  two  reasons : First,  because 
they  considered  the  investment  a conservative  and  sure  in- 
vestment to  advise  their  clients  to  make ; second,  because  they 
realized  that  Cleveland  is  a growing  city  and  must  need  en- 
larged railway  facilities  constantly,  and  that  the  money  for 


92 


such  extensions  and  additions  as  the  city’s  necessities  shall 
require  should  largely  come  from  the  permanent  investor,  all 
speculation  in  the  stock  having,  by  the  ordinance,  been  elim- 
inated.” 

The  Cleveland  Trust  Company  has  made  similar  invest- 
ments and  given  similar  advice  to  clients.  Mr.  Nutt’s  letter 
enclosed  a communication  from  Mr.  F.  H.  Goff,  the  president 
of  The  Cleveland  Trust  Company  and  one  of  the  makers  of 
our  franchise,  on  this  subject  of  investment  and  fair  return. 

Other  savings  and  trust  companies  have  also  invested  in 
the  stock,  for  themselves  and  for  clients.  They  are  all  very 
anxious  that  we  ask  you  to  amend  Section  22  of  our  franchise 
so  as  to  permit  us  to  charge  a higher  rate  of  fare,  if  necessary, 
than  the  maximum  rate  there  fixed — not  that  the  rate  that  may 
be  in  effect  at  any  time  in  the  future  shall  exceed  the  cost  of 
operaing  the  road,  but  that  they  and  their  clients  may  be  sure 
at  all  times  that  their  stock  will  be  worth  par  in  the  market, 
that  the  six  per  cent,  return  upon  it  will  be  certain,  and  that 
the  company  may  be  enabled  to  raise  money  to  pay  for  any 
additional  track,  rolling  stock  or  other  property  that  you  may 
order. 

I quote  a paragraph  from  a letter  sent  me  by  Mr.  J.  A. 
House,  president  of  The  Guardian  Savings  & Trust  Company, 
under  date  of  April  23rd: 

“As  you  doubtless  know,  we  have,  from  time  to  time  in 
the  past,  invested  the  trust  funds  of  this  company  in  the  stock 
of  the  Cleveland  Railway  Company,  and  have,  on  numerous 
other  occasions,  recommended  it  as  a desirable  investment  for 
trust  funds,  believing  that  the  Tayler  franchise  fully  protected 
the  investor.” 

The  following  is  from  the  Plain  Dealer  of  June  5th: 

“Executives  of  banks  and  trust  companies  in  Cleveland 
also  have  been  advising  patrons  seeking  safe  investments  to 
put  their  money  in  stock  of  the  street  car  company.  News  of 
the  mayor’s  letter  was  received  with  concern  in  financial  circles. 
Warren  S.  Hayden,  chairman  of  the  board  of  directors  of  the 
Union-Commerce  National  Bank,  declared  if  the  mayor’s  sug- 
gestion is  carried  out,  the  action  would  amount  to  repudiation 
of  an  agreement  by  the  city  to  pay  six  per  cent  dividend.  He 
pointed  out  the  city  had  pledged  its  assets  as  security  its  part 
of  the  contract  would  be  fulfilled.  ‘Not  only  is  there  a moral 
obligation  resting  on  the  city  to  perform  its  part  of  the  agree- 
ment made  to  protect  investors  in  stock  of  the  railway  com- 
pany, but  the  welfare  of  carriers  is  at  stake,’  said  Mr.  Hayden. 
Unless  the  dividends  are  paid,  the  stock  will  drop,  and  capital 
cannot  be  obtained  to  meet  the  needs  of  the  public.” 

The  probate  judge  has  approved  and  advised  the  invest- 
ment of  trust  funds  in  the  stock  of  the  company,  as  stated  by 
him  in  an  interview  in  the  same  paper : 

93 


“Probate  Judge  Hadden,  who  for  eight  years  has  been 
advising  guardians  and  trustees  to  invest  trust  funds  in  Cleve- 
land Railway  Company  stock,  expressed  dismay  yesterday 
when  told  that  Mayor  Davis  had  suggested  to  council  that 
dividends  to  stockholders  of  the  street  car  company  be  cut 
from  six  to  four  per  cent.  Judge  Hadden  declared  he  had 
approved  the  investment  of  trust  funds  in  street  car  company 
stock,  because  of  the  city  guarantee  that  six  per  cent,  dividends 
would  be  paid  regularly,  and  the  stock  was  ‘tax  free/  He 
would  make  no  estimate  of  the  number  of  wards,  widows  and 
orphans  whose  funds  had  been  invested  in  the  stock  with  his 
approval.” 

And  the  following  editorial,  from  the  Plain  Dealer  of 
June  6th,  is  appropriate  here: 

“DIVIDEND  MUST  STAND. 

“A  foundation  stone  of  the  Tayler  traction  ordinance  is 
the  assurance  possessed  by  every  stockholder  of  the  company 
that  he  will  receive  six  per  cent,  upon  his  investment.  It 
would  be  nothing  less  than  a breach  of  faith  were  the  city  to 
attempt  the  abrogation  of  this  agreement.  Mayor  Davis  can 
scarcely  have  thought  the  matter  through  when  he  made  this, 
part  of  his  suggestion.  The  city  evidently  faces  the  necessity 
of  readjusting  certain  features  of  its  contract  with  the  street 
railway  company.  Unparalleled  costs  put  upon  the  company 
burdens  that  could  not  be  foreseen,  and  the  council  owes  it 
to  the  community  to  see  that  the  rights  of  the  car  riders  are 
protected.  The  Tayler  plan  of  operation  is,  of  course,  to  be 
preserved,  for  its  soundness  and  fairness  have  been  demon- 
strated by  nearly  a decade  of  experience.  To  reduce  the  guar- 
anteed dividend  rate  now  would  strike  at  the  heart  of  the 
compact  made  after  a ten-year  battle  between  the  public  and 
the  company.  It  would  advertise  the  city  as  a community 
which  breaks  its  pledges — a bad  kind  of  advertising,  any  citizen 
will  agree.  The  question  of  a higher  maximum  rate  of  fare 
has  not  yet  come  to  issue.  When  the  company  asks  that  a 
higher  rate  be  permitted,  precipitating  the  whole  discussion, 
city  and  company  must  put  all  their  cards  on  the  table,  con- 
cealing nothing,  attempting  merely  to  reach  an  agreement  fair 
alike  to  the  public  and  to  the  company.  Approached  in  this 
spirit,  the  question  presents  no  serious  difficulties.  It  is  a 
mere  matter  of  concession  and  adjustment.” 

2.  The  mayor  asks  whether  the  company  will  “co- 
operate with  the  city  in  securing  federal  action  to  differentiate 
opening  and  closing  hours  of  employment  so  as  to  more  evenly 
distribute  the  traffic  during  the  day  and  eliminate  congestion 
during  the  so-called  ‘rush  hour/  ” Yes.  The  idea  of  urging 
varying  hours  of  opening  and  closing  factories,  stores  and 
other  places  of  business  is  not  new;  it  has  been  advocated  by 

94 


the  company  for  many  years.  But  the  possibility  of  giving 
effect  to  the  plan  has  been  much  greater  under  the  Tayler 
franchise  than  it  ever  was  before,  because  the  people  realizing 
the  saving  in  cost  of  transportation  that-  would  result  from 
the  carrying  out  of  the  plan  and  appreciating  that  this  saving 
would  help  toward  the  maintenance  of  a rate  of  fare  lowetf 
than  the  fare  charged  in  other  cities,  are  more  willing  than 
they  were  before  the  Tayler  settlement,  and  more  willing  than 
the  people  of  other  cities  now  are,  to  aid  in  bringing  about 
such  suggested  changes  in  working  hours.  Now  that  the  fed- 
eral government  is  urging  economies  in  all  directions  the  op- 
portunity to  establish  varying  hours  for  opening  and  closing 
in  Cleveland  is  still  greater.  The  company  will  do  all  that  it 
can  to  reduce  in  that  way  the  cost  of  transportation  and  will 
welcome  your  active  and  earnest  co-operation.  The  idea  was 
more  fully  presented  in  my  report  to  the  stockholders  for  the 
fiscal  year  1916. 

3.  The  mayor’s  third  question  is:  “Will  the  company 

agree  to  restrict  its  extensions  and  improvements,  both  capital 
expense  and  renewals,  except  when  absolutely  necessary,  in 
conformity  with  the  policy  adopted  by  the  United  States  gov- 
ernment in  the  operation  of  steam  railroads  ?”  It  will.  I an- 
nounced the  company’s  policy  in  this  respect  in  my  annual 
report  to  the  stockholders  last  January,  in  these  words:  “In 
line  with  the  general  policy  of  the  nation,  expenditures  for 
track  extensions  and  other  new  property  will  probably  be  held 
down  as  closely  as  possible  in  the  current  year.  The  principal 
betterments  of  1918 — the  only  ones  of  which  we  are  now 
certain — will  be  the  tracks  on  the  new  Superior-Detroit  via- 
duct, and  the  twenty-five  cars  before  mentioned.  The  esti- 
mated cost  of  the  tracks,  depots  and  overhead  line  on  the  via- 
duct is  $250,000;  the  cars  will  cost  about  $200,000.” 

And  in  our  application  to  the  capital  issues  committee  of 
the  general  government  in  March  for  approval  of  our  proposed 
issue  of  additional  stock,  after  referring  to  the  provisions  of 
our  franchise  in  regard  to  the  security  of  the  investment, 
limitation  of  interest,  the  flexible  schedule  of  fares  and  the 
method  of  making  extensions  or  other  additions  to  the  prop- 
erty, we  said : “The  interests  of  the  people  of  Cleveland  and 
of  street  railway  investors  being  thus  safeguarded,  there  is 
little  danger  or  likelihood  of  the  issue  of  additional  securities 
for  any  unnecessary  purpose.  It  certainly  is  not  the  intention 
of  the  company  to  spend  any  of  the  money  that  it  will  obtain 
from  the  sale  of  the  proposed  issue  of  stock  for  the  construc- 
tion of  tracks  or  the  acquisition  of  any  property  not  actually 
needed  for  public  purposes.  But  the  company  is  under  con- 
tract obligation  to  the  people  of  Cleveland  to  add  to  its  track- 
age and  its  rolling  stock  when  additions  are  needed  for  the 
public  good.  Stock  not  taken  by  the  stockholders  under  the 

95 


proposed  offer  to  them  will  be  sold  only  when  money  is  needed 
by  the  company  for  investment  in  improvements  authorized 
by  the  city  and  the  state.  It  will  probably  be  several  years 
before  all  of  the  $2,700,000.00  of  stock  is  sold.” 

It  will  be  seen  that  we  had  made  this  promise  to  restrict 
expenditures  for  extensions  and  improvements  twice  in  writ- 
ing before  the  mayor  asked  his  question.  I now  repeat  the 
promise.  Indeed,  I am  entirely  willing  to  agree  to  propose 
no  extension  or  improvement  while  the  war  lasts,  and  to  make 
only  such  additions  to  property  as  may  be  suggested  by  you. 

4.  I cannot  agree  to  postpone  the  charging  off  of  the 
suspense  accounts.  There  should  have  been  no  such  accounts. 
Their  establishment  was  a compromise  between  the  company 
and  the  city,  made  at  the  city’s  request  or  suggestion.  They 
represent  the  unearned  cost  of  service  rendered  and  the  un- 
pro  vided-f  or  value  of  property  worn  out  or  made  obsolete  in 
past  years.  They  should  have  been  provided  for  from  the 
earnings  of  those  years,  or  should  be  provided  for  from  cur- 
rent earnings.  The  people  who  received  the  service  and  wore 
out  the  property  should  pay;  the  obligation  should  not  be 
shifted  to  the  car  riders  of  the  distant  future. 

That  some  of  these  suspense  accounts,  as  the  mayor  says, 
“represent  accumulated  over-expenditures  in  operating  and 
maintenance  funds  * * * for  a period  of  eight  years”  is 

not  our  fault,  nor  yours  to  any  great  extent,  but  the  fault  of 
former  councils ; or  perhaps,  rather,  it  was  due  to  the  inability 
of  the  company  to  make  the  representatives  of  the  city  under- 
stand the  situation  and  the  necessity  for  reserves  for  main- 
tenance and  renewals  as  well  as  for  operating  expenses. 

Let  me  recall  the  history  of  some  of  the  efforts  that  we 
made  to  obtain  allowances  that  would  have  obviated  the  neces- 
sity of  establishing  such  suspense  accounts — such  postpone- 
ments of  the  settlement  of  obligations. 

On  June  20,  1910,  we  asked  the  council  for  an  increase 
in  the  allowance  for  operating  expenses.  The  council  refused 
to  grant  the  request.  On  January  23,  1911,  we  repeated  the 
request,  and  it  was  again  refused.  We  asked  again  on  Feb- 
ruary 17,  1912,  and  were  again  refused.  A year  later,  on 
February  12,  1913,  we  reported  to  the  council  an  over- 
expenditure for  maintenance  of  $292,315,  and  an  over-expendi- 
ture of  the  operating  allowance  of  $203,542,  and  asked  an  in- 
crease in  both  the  maintenance  and  operating  expense  allow- 
ances. The  council  declined  to  consent  to  any  increase  in 
either,  and  it  was  not  until  after  an  expensive  arbitration  in 
May  and  June,  1913,  that  our  demand,  made  in  June,  1910, 
a little  more  than  three  months  after  the  Tayler  ordinance 
went  into  effect,  was  granted.  The  increases  thus  awarded 
were,  in  our  judgment,  insufficient.  On  May  8,  1915,  we  asked 
for  an  increase  of  half  a cent  per  car-mile  in  the  operating 

96 


expense  allowance,  and  it  was  granted.  On  March  20,  1916, 
we  asked  that  the  maintenance  allowance  be  increased  to  eight 
cents  per  car-mile.  The  request  was  refused.  On  May  5,  1916, 
we  asked  that  the  operating  expense  allowance  be  increased 
to  thirteen  and  one-half  cents  per  car-mile,  and  our  request  was 
granted.  On  February  5,  1917,  we  asked  that  the  operating 
expense  allowance  be  increased  to  fifteen  cents  per  car-mile. 
The  council  consented  to  an  increase  to  fourteen  and  one-half 
cents.  On  April  30,  1917,  we  asked  for  an  increase  to  sixteen 
and  sixteen  hundredths  cents  per  car-mile,  but  the  request 
was  refused.  On  January  25,  1918,  we  asked  you  for  an  in- 
crease in  the  maintenance  allowance  to  at  least  eight  cents  per 
car-mile,  and  in  the  operating-expense  allowance  to  sixteen 
cents  per  car-mile.  On  February  18th  you  consented  to  an 
increase  of  one  cent  per  car-mile  in  the  maintenance  allow- 
ance, and  on  February  25th  to  an  increase  in  the  operating 
expense  allowance  to  sixteen  cents  per  car-mile. 

It  is  true  that  at  various  times  the  council  authorized  the 
company  to  write  off  the  reproduction  value  of  obsolete  prop- 
erty abandoned  and  retired  from  service  at  fixed  or  varying 
amounts  per  month,  thus  in  effect  increasing  the  maintenance 
and  renewal  allowance  by  these  amouts.  But  the  allowances 
should  have  been  made  sooner. 

If  our  requests  for  larger  allowances  in  the  early  years 
of  operation  under  the  Tayler  franchise  had  been  granted,  an 
earlier  increase  in  rate  of  fare  would  have  resulted,  but  the 
company  would  not  now  be  in  the  position  of  having  its  credit 
questioned  and  of  having  to  meet  a request  by  the  mayor  for 
a reduction  in  the  rate  of  return  on  investment  or  a further 
postponement  of  the  payment  of  obligations  incurred  in  carry- 
ing the  passengers  who  rode  in  1910  and  other  early  years. 
The  maintenance  and  operating  expenses  of  those  years  would 
have  been  paid  from  the  earnings  of  those  years,  and  the  car 
riders  of  these  years  of  war  and  high  prices  would  not  be 
called  upon  now  to  bear  so  heavy  a burden  as  has  been  put 
upon  them  by  council  agreements  deferring  the  wiping  out  of 
deficits  and  depreciation. 

The  present  special  allowances,  so-called,  are  not  as  large 
as  they  ought  to  be.  Several  years  will  be  required  to  ex- 
tinguish past  deficits.  Other  deficits  are  threatening,  and  will 
surely  come  unless  the  cost  of  operation  per  car-mile  and  per 
passenger  is  reduced  or  the  maintenance  and  operating  expense 
allowances  increased;  and  an  increase  in  the  allowances  will, 
I think,  so  reduce  the  balance  in  the  interest  fund  as  to  make 
another  increase  in  the  rate  of  fare  necessary.  As  I have 
stated  before,  however,  it  is  impossible  now  to  tell  what  this 
increase,  if  it  becomes  necessary  by  reason  of  the  coming  award 
of  the  labor  board,  should  be. 

The  company  is  entirely  willing  to  do  all  it  can  to  keep 

97 


down  expenses,  and  to  postpone  the  making  of  improvements 
that  will  increase  investment  and  so  increase  the  amount  of 
interest  to  be  paid,  and  to  consider  any  suggestions  that  you 
may  make  in  these  respects.  While  we  have  not  yet  asked  for 
an  increase  in  the  rate  of  fare  beyond  the  rate  now  in  effect, 
we  agree  with  the  mayor  that  any  substantial  increase  in  train- 
men’s wages  “will  necessitate  immediate  consideration  of  the 
rate  of  fare.”  I believe  that  we  shall  be  able  to  show  you  to 
your  entire  satisfaction  what  increase  will  be  necessary.  If 
you  desire  to  discuss  the  matter  before  we  make  formal  appli- 
cation for  a higher  rate,  I shall,  as  already  stated,  be  glad  to 
meet  you  for  that  purpose.  I am  sure  that  the  people  of  Cleve- 
land still  think,  as  they  thought  when  they  approved  the  Tayler 
franchise,  that  the  rate  of  fare  should  be  as  high  as  the  cost 
of  operation,  including  a return  upon  investment  sufficient  to 
make  it  possible  for  the  company  to  finance  its  needs  for  such 
extensions  and  other  betterments  as  the  council  may  order  or 
approve. 

The  schedule  of  fares  in  Section  22  of  the  franchise  is  said 
to  be  elastic.  It  is  elastic  only  between  a fixed  minimum  and 
a fixed  maximum.  The  rate  now  is  the  maximum  rate,  and 
the  balance  in  the  interest  fund  is  far  below  $300,000.  The 
mayor  well  says,  “When  the  Tayler  franchise  was  written, 
neither  the  city  nor  the  company  could  foresee  a condition  so 
abnormal  as  to  require  a higher  rate  of  fare  than  the  maximum 
in  order  to  sustain  a six  per  cent,  dividend  on  the  company’s 
stock.  For  this  reason  there  was  no  provision  made  in  it  to 
cover  conditions  as  they  now  exist.”  Judge  Tayler,  in  a public 
address  in  February,  1910,  said  that  he  had  never  said  that 
he  was  in  favor  of  any  particular  rate  of  fare,  and  that  neither 
three-cent  fare  nor  any  other  rate  of  fare  had  anything  to  do 
with  his  plan,  which  was  to  give  to  the  community  service  at 
the  cost  of  the  service,  and  he  asked,  “Who  knows  what  the 
service  or  the  cost  of  service  in  the  city  of  Cleveland  will  be 
ten,  fifteen  or  twenty  years  from  now?  Three  cents  may  be 
as  extravagant  a rate  of  fare  then  as  ten  cents  would  be  now. 
Five  cents  may  be  as  low  a rate  of  fare  then  as  two  cents 
would  be  now.  It  all  depends  upon  the  cost  of  then  furnishing 
that  thing  which  the  people  demand.  * * * If  it  should  be  true, 
as  we  discover  in  speculations  in  the  newspapers,  that  a new 
method  of  supplying  electric  current  has  been  devised,  whereby 
the  cost  is  reduced  sixty  per  cent.,  the  cost  of  moving  cars  will 
be  reduced.  If  it  should  be  discovered  that  cars  carrying  twice 
as  many  passengers  could  as  easily  be  carried  over  these  tracks, 
that  it  would  not  require  two  men  to  operate  a car — that  an 
infinity  of  other  things  which  we  now  see  present  in  the  prac- 
tical conduct  of  a street  railroad  are  not  necessary — then  who 
can  say  what  the  cost  of  transportation  will  then  be?  And 
who  is  it  that  can  put  a limit  to  the  accomplishment  of  human 

98 


ingenuity?  Who  can  say  that  we  now  see  the  limit  of  cost 
of  the  thing  that  is  thus  furnished?  And,  on  the  other  hand, 
who  can  say  what  is  the  limit  by  way  of  added  expense  to  the 
furnishing  of  the  thing  that  we  must  have?  In  this  city,  every 
day  in  the  year,  approximately  five  hundred  thousand  people, 
on  an  average,  are  carried  on  our  street  cars;  or  that  will  be 
the  average,  at  all  events,  for  the  next  five  or  six  years;  and 
they  must  be  carried  in  some  form  and  by  some  conveyance 
or  other.  And  no  man  can  say  how  much  it  is  going  to  cost.” 
If,  instead  of  war  and  high  prices  in  the  past  four  years, 
there  had  been  peace  and  low  prices,  and  if  it  had  been  possible 
because  of  low  prices  and  efficiency  in  operation  to  reduce  the 
rate  of  fare  to  the  minimum  provided  for  in  Section  22  of 
the  franchise,  and  if  by  operating  at  that  rate  of  fare  the  com- 
pany had  accumulated  an  interest  fund  in  excess  of  $700,000, 
I am  sure  that  the  stockholders  would  not  have  objected  to  a 
further  decrease  in  the  rate  of  fare  to  a rate  below  the  mini- 
mum fixed  in  the  franchise,  because  the  fundamental  principle 
of  the  franchise,  as  Judge  Tayler  more  than  once  stated,  is 
service  at  cost.  And  so,  if  high  wages  increase  the  cost  of 
service  to  an  amount  higher  than  the  maximum  rate  of  fare 
fixed  in  the  franchise,  no  objection  should  be  made  by  the  city 
to  an  increase  in  the  rate  to  the  cost  of  service. 

Judge  Tayler  said  further  in  the  address  from  which  I 
have  quoted : “A  maximum  rate  of  fare,  although  not  in  prin- 
ciple necessary  in  this  ordinance , is  fixed  at  seven  tickets  for 
twenty-five  cents,  with  a cent  charge  for  a transfer.  Philoso- 
phically, no  franchise  can  be  sold,  with  propriety  either  to  the 
seller  or  the  buyer,  which  fixes  an  arbitrary  or  inflexible  rate 
of  fare;  and  that  is  the  vice  of  nearly  all  of  the  street  railway 
ordinances,  I suppose,  in  the  communities  of  this  country. 
There  is  no  more  soundness  of  business  conduct  in  giving  a 
franchise  which  declares  that  the  rate  of  fare,  in  Ohio,  for 
instance,  where  the  extreme  life  of  a franchise  is  twenty-five 
years,  is  three  cents  or  four  cents  or  five  cents,  than  there 
would  be  if  the  blast-furnace  proprietors  of  the  Mahoning 
valley  should  today  buy  their  ore  supply  for  the  next  twenty- 
five  years  at  a given  price;  they  either  pay  too  much  or  too 
little,  because  it  is  beyond  the  possibility  of  human  wisdom  to 
say  what,  for  that  great  period  of  time,  will  be  the  fair  price 
of  that  commodity  which  nature  furnishes  us.” 

The  Tayler  grant  was  written  and  adopted  in  the  spirit 
of  justice  and  co-operation,  and  should  be  interpreted  and  fol- 
lowed in  the  same  way.  Both  the  city  and  the  company  have 
this  present  opportunity  to  manifest  the  proper  spirit.  Judge 
Tayler  himself  said  of  the  franchise,  “The  street  railway  set- 
tlement is  bottomed  upon  one  thing  upon  which  no  street  rail- 
road problem  or  situation  has  ever  before  rested,  and  that  is, 
so  far  as  human  endeavor  can  make  it,  justice  to  the  commun- 

99 


ity  and  justice  to  the  people  who  furnish  the  money  where- 
with the  community  gets  its  local  transportation/’ 

Respectfully, 

JOHN  J.  STANLEY, 

President. 


EXHIBIT  No.  17. 

THE  CLEVELAND  CHAMBER  OF  COMMERCE. 

Cleveland,  June  6,  1918. 

The  Honorable  City  Council  of  the  City  of  Cleveland. 
Gentlemen : 

I have  the  honor  of  transmitting  to  you  the  following 
resolution  adopted  on  behalf  of  The  Cleveland  Chamber  of 
Commerce  by  its  board  of  directors  today: 

Whereas,  The  ordinance  granting  the  Cleveland  Rail- 
way Company  the  franchise  under  which  it  operates  in  the 
city  of  Cleveland  commits  the  city  and  the  railway  company 
to  the  principle  of  furnishing  the  public  with  transportation 
at  cost,  with  six  per  cent.  (6%)  return  on  the  invested  cap- 
ital, together  with  such  sums  for  maintenance  and  better- 
ment to  the  property  as  will  insure  good  service  in  its  oper- 
ation; and 

Whereas,  War  conditions  not  anticipated  when  the  fran- 
chise was  granted  have  so  increased  the  cost  of  operation, 
largely  by  reason  of  the  advance  in  cost  of  labor  and  mate- 
rial, as  to  make  it  doubtful  whether  the  maximum  rate  of 
fare  provided  for  in  the  franchise  and  now  in  force  will  pro- 
vide sufficient  funds  to  maintain  the  property  in  condition 
to  furnish  the  kind  of  service  contemplated  in  the  franchise 
and  to  pay  six  per  cent.  (6%),  dividends  upon  the  invested 
capital  ; 

Now,  therefore,  be  it  resolved,  that  it  is  the  opinion  of 
The  Cleveland  Chamber  of  Commerce  that  the  ordinance 
granting  the  franchise  to  The  Cleveland  Railway  Company 
should  be  amended  by  the  addition  of  a new  scale  of  fares, 
increasing  the  maximum  rate  of  fare,  provided  such  increase 
becomes  necessary,  and  under  the  same  terms  and  condi- 
tions as  are  now  incorporated  in  the  present  franchise,  to  the 
end  that  The  Cleveland  Railway  Company  may  continue  to 
furnish  street  railway  transportation  in  the  city  of  Cleveland 
at  cost  and  pay  six  per  cent  (6%)  dividends  to  its  stock- 
holders, and  maintain  a high  standard  of  service. 

Very  truly  yours, 

MYRON  T.  HERRICK, 

President. 


100 


EXHIBIT  No.  18a. 


Cents  per  hour.  Percent. 
Employment.  1910.  1918.  Increase. 

Street  railway  men 24  .35  41. 

Brick-layers 60  .90  50. 

Iron-workers 60  .90  50. 

Lathers 56^4  -85  51.1 

Plumbers 56^4  .81^4  43.8 

Steam-fitters 56^4  -81/4  44.4 

Carpenters 45  .80  77.8 

Hoisting  engineers 45  .85-.90  88.9-100. 

Building  laborers 25-.35  .55  57.1-120. 

Pipe-fitters 45  .70  55.5 

Painters 42^4  .67^4  58.8 

Stone-cutters 56^4  .77^4  37.8 


Average 48.29  77.50  60.49 


EXHIBIT  No.  18b. 

UNITED  STATES  RAILROAD  ADMINISTRATION. 

W.  G.  McAdoo,  Director  General. 

GENERAL  ORDER  No.  27. 

WAGES  OF  RAILROAD  EMPLOYEES. 

Washington,  May  25,  1918. 

RATES  OF  WAGES  OF  RAILROAD  EMPLOYES. 

General  Order  No.  27  of  Director  General  McAdoo,  of 
the  United  States  Railroad  Administration,  establishing  in- 
creases in  wages  of  railroad  employes,  issued  May  25th,  1918, 
applies  to  the  employes  of  the  following  railroads  operating 
in  the  Cleveland  District : 

Baltimore  & Ohio  Railroad  Company,  Bessemer  & Lake 
Erie  Railroad  Company,  Cleveland,  Cincinnati,  Chicago  & St. 
Louis  Ry.  Company,  Erie  Railroad  Company,  Lake  Erie  & 
Western  R.  R.  Company,  New  York  Central  Railroad  Com- 
pany, New  York,  Chicago  & St.  Louis  R.  R.  Company,  Penn- 
sylvania R.  R.  Company,  Pittsburgh  & Lake  Erie  R.  R.  Com- 
pany, Wheeling  & Lake  Erie  Railway  Company. 

Section  C of  the  order,  page  13,  shows  rates  of  pay  in 
cents  per  hour  at  the  old  and  new  rates.  “Old  rates  are  those 
of  December  191 5.”  We  quote  only  such  part  of  that  section 
as  is  comparable  with  the  scale  paid  our  trainmen : 

Old  rate  per  hour.  New  rate  per  hour. 

29  cents  41  cents 

32  cents  45  cents. 


101 


EXHIBIT  No.  19a. 


Wages  of  Trainmen  in  the  Year  from  May  1,  1917, 
to  May  1,  1918. 

The  wages  of  conductors  and  motormen  were  32  cents 
per  hour  during  the  first  year  of  service  and  35  cents  per 
hour  thereafter.  The  average  amount  paid  was  substantially 
34  cents  per  hour. 

The  following  table  shows  the  amount  of  wages  paid  in 
each  of  the  twelve  months  and  the  amount  per  car-mile : 

Per 

1917.  Wages.  Car-Mile. 

May $ 225,623.10  7.2473c 

June 223,906.75  7.2602c 

July 228,336.25  7.2143c 

August 228,243.92  7.2471c 

September 212,326.20  7.2017c 

October 220,228.95  7.2495c 

November... 215,043.25  7.2949c 

December 225,131.00  7.3292c 

1918. 

January 215,239.75  7.3432c 

February 198,594.20  7.3835c 

March 217,394.05  7.2721c 

April 210,417.00  7.2727c 


$2,620,484.42  7.2749c 


EXHIBIT  No.  19b. 

WHAT  AN  INCREASE  IN  WAGES  MEANS. 

The  following  table  shows  what  increases  of  from  1 
cent  to  26  cents  per  hour  would  mean : 

c per  Cents  per 

hour.  Wages.  car-mile. 

1  $ 77,000  .2139 

2 154,000  .4277 

3 231,000  .6416 

4 . 308,000  .8555 

5 385,000  1.0694 

6 462,000  1.2833 

7 539,000  1,4972 

8 616,000  1.7111 

9 693,000  1.9250 

10  770,000  2.1388 

11  847,000  2,3527 


102 


12... 924,000  2.5666 

13  1,001,000  2.7805 

14  1,078,000  2.9944 

15  1,155,000  3.2083 

16  1,232,000  3.4251 

17  1,309,000  3.6389 

18  1,386,000  3.8528 

19  1,463,000  4.0667 

20  1,540,000  4.2806 

21  1,617,000  4.4945 

22  1,694,000  4.7084 

23  1,771,000  4.9223 

24  . ...  1,848,000  5.1362 

25  1,925,000  5.3501 

26  2,002,000  5.5639 


: 0;  . 

EXHIBIT  No.  19c. 

Trainmen’s  Wages  Per  Car-Mile  at  Various  Rates  Per  Hour. 


The  present  operating-expense  allowance  is  16  cents 
per  car-mile.  Of  this  amount  the  trainmen  get  7.2749 
cents,  the  average  in  the  twelve  months  ended  April  30, 
1918,  as  shown  in  Exhibit  No.  19a.  More  than  45%  of  the 
operating-expense  allowance  goes  to  the  conductors  and 
motormen.  What  their  wages  would  amount  to  per  car- 
mile  at  the  advances  shown  in  Exhibit  No.  19b  is  shown 
below : 


Wage  per  hour. 

34  cents 

35  cents 

36  cents 

37  cents 

38  cents 

39  cents 

40  cents 

41  cents 

42  cents 

43  cents 

44  cents 

45  cents 

46  cents 

47  cents 

48  cents 

49  cents 

50  cents 

51  cents 

52  cents 


Wage  per  car-mile. 
7.2749  cents 
7.4888  cents 
7.7026  cents 
7.9165  cents 
8.1304  cents 
8.3443  cents 
8.5582  cents 
8.7721  cents 
8.9860  cents 
9.1999  cents 
9.4137  cents 
9.6276  cents 
9.8415  cents 
10.0554  cents 
10.2693  cents 
10.4832  cents 
10.7000  cents 
10.9138  cents 
11.1277  cents 


103 


53  cents 

54  cents 

55  cents 

56  cents 

57  cents 

58  cents 

59  cents 

60  cents 


11.3416  cents 
11.5555  cents 
11.7694  cents 
11.9833  cents 
12.1972  cents 
12.4111  cents 
12.6250  cents 
12.8388  cents 


Sixty  cents  per  hour  would  be  an  increase  of  71%  over 
the  rate  in  the  agreement  made  May  1,  1917. 

The  operating-expense  allowance  is  16  cents  per  car- 
mile  ; trainmen’s  wages  at  60  cents  per  hour  would  be  80% 
of  this. 


EXHIBIT  No.  20. 

BRADSTREET’S  WEEKLY  FOOD  INDEX. 

Based  on  prices  per  pound  of  thirty-one  articles  used  for 

food. 


Weekended:  1918. 

January  5 $4.48 

12  4.50 

19  4.55 

26  4.55 

February  2 4.53 

9 4.52 

16 4.50 

23 4.55 

March  2 4.42 

9 4.41 

16 4.40 

23 4.32 

30 4.32 

April  6 4.36 

13  4.39 

20  4.41 

27  4.39 

May  4 4.41 

11 4.42 

18 4.33 

25 4.28 

June  1 4.24 

8 4.27 

15 4.29 


1917. 

Increase. 

% Increase. 

$3.31 

$1.17 

35.34 

3.32 

1.18 

35.54 

3.30 

1.25 

37.88 

3.33 

1.22 

36.64 

3.37 

1.16 

34.42 

3.44 

1.08 

31.40 

3.50 

1.00 

28.57 

3.51 

1.04 

29.63 

3.46 

.96 

27.75 

3.50 

.91 

26.00 

3.52 

.88 

25.00 

3.55 

.77 

21.69 

3.67 

.65 

17.71 

3.72 

.64 

17.20 

3.83 

.56 

14.62 

3.94 

.47 

11.93 

3.91 

.48 

12.28 

3.98 

.43 

10.80 

4.03 

.39 

9.68 

4.04 

.29 

7.18 

4.00 

.28 

7.00 

4.00 

.24 

6.00 

4.00 

.27 

6.75 

3.95 

.34 

8.61 

Average  . 


$4.40  $3.67 

104 


$0.73 


19.89 


No. 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18a 

18b 

19a 

19b 

19c 

20 


EXHIBITS. 


Title  or  Subject.  Page 

Present  arrangement  of  runs  on  typical 

line 23 

Demanded  arrangement  of  runs  on  typi- 
cal line 24 

Present  and  proposed  typical  run-guides  25 

Tayler  franchise 29 

Estimate  of  earnings,  expenses,  etc 70 

Earnings  per  car-mile  by  lines  in  April. . 71 

Do.  in  first  four  months  of  year 72 

Address  of  Judge  Robt.  W.  Tayler 73 

Plan  of  merger  of  Express  Companies. . 79 
Letter  of  J.  R.  Nutt  to  Mayor  and  Council  80 

Letter  of  F.  H.  Goff  to  J.  R.  Nutt 82 

Letter  of  J.  A.  House  to  Company. .....  83 

Interview  with  Judge  Alex.  Hadden. ...  84 

Letter  of  H.  L.  Wilson  to  H.  J.  Davies. . 85 

Letter  of  Mayor  to  Council 86 

Letter  of  John  J.  Stanley  to  Council 88 

Resolution  of  Cleveland  Chamber  of 

Commerce 100 

Wages  in  other  employments 101 

Steam-railroad  wages  under  General 

Order  No.  27 101 

Trainmen’s  wages  in  12  months  begin- 
ning May  1,  1917 102 

Increases  of  from  1 to  26  cents  per  hour.  102 
Wages  per  car-mile  now  and  plus  in- 
creases   103 

Bradstreet’s  Index  of  Food  Prices 104 


Referred 

to 

13 

13 

13 

4 

15 

4 

4 

6 

7 

18 

18 

18 

18 

19 

20 
20 

20 

20 

21 

12 

12 

12 

21 


105 


